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Technical Analysis of Canadian & US Financials

August 11, 2010 Leave a comment

I am going use the Financial Sector Spyder ETF XLF as a proxy for US financials and S&P TSX Capped Financials Sector ETF XFN (listed on TSX) as a proxy for Canadian Financials…

Since making a 52-week high in April 2010, the Canadian Financial Sector has tried to break the downtrend (50/200 day moving average) 4 times in the last 3 months and has failed each time…

Negative:

  • 4 failed attempts to breakout
  • Death Cross (the 50 day moving average crossed the 200 day moving average from above)
  • 50 & 200 day moving averages broken to the downside
  • Downtrend line broken to the downside

Positive: Support at current levels (21.27)

Chart showing technical analysis of XFN

Source: stockcharts.com

the US financials chart is pretty similar…

Negative:

  • 5 tries to breakout without any success
  • Death Cross
  • 50 & 200 day moving averages broken to the downside
  • MACD crossover

Positive: Downtrend support is still intact

Chart showing technical analysis of XLF

Source: stockcharts.com

All-in-all… technicals are similar for both financial sectors and are likely to follow the broader market trends…

…perhaps the fundamentals tell a different story

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