Bank Index: Bullish Follow-Through

For the last few weeks I've been focused on the banking sector as it was getting very close to long term fibonacci support. Just like magic the 423.6% supported and the last two days have seen a nice bounce.

I put a new set of fibonacci levels so I can see the next probable target areas should this bounce continue. There are several topside targets starting with the downtrending 20 day moving average which is just overhead at 65.13.

The next area above the 20MA is at 75 where there is old support that can act as new resistance. Above the 20MA the downtrending 50MA has acted as resistance the last FOUR times it was tested. If this is a powerful relief rally it could blast through the 50MA and reach the 23.8% fib at 91.63.

Above 95, it's clear sailing up to the 112 area.

That should cover the upside targets for the next few weeks, and for the downside targets it would be a retest of the recent lows in the 46 area. Below 46 is uncharted territory so no downside targets as of yet, but the good news is it can only go down to zero and that would effectively mean our banking system has collapsed and we'd have more important things to worry about.

Despite the two up days, keep in mind that the Bank Index is still in a downtrend. This may only be a short term rally so keep your eyes on the charts.

S&P Bank Index: