Canadian Banks Coming Into Season

Comparing banks across the border

Seasonal research from Thackray’s Guide and Equity Clock suggest that Canadian banks can move well between October and the end of the year. This year, the banks had a favorable move over the summer. The BMO Equal Wt. CDN Bank ETF (ZEB) is a pretty good benchmark for the group – and you can see that this ETF had a nice run recently. However, ZEB is about to face some technical resistance around $25 – or thereabouts. I’m inclined to see if the banks/ this ETF can blow through that level before committing new capital to the sector. The weekly chart suggests a few of the mid-termed momentum indicators are overbought.

The BMO US Bank ETF – currency hedged  (ZUB) does not face significant resistance until it goes over $20. Momentum is overbought, but at least there is less overhead selling pressure on the group for a while. It recently broke through a bit of an overhead neckline at $19, giving it another positive box to check off. BTW—you can buy a non-hedged version of this ETF via the ticker symbol ZWB. Seasonality for the US financials begins in December.

Keith on BNN

I’ll be on BNN for their 6:00pm show next Wednesday October 5^th. Phone in with your questions on technical analysis for Keith during the show. CALL TOLL-FREE 1-855-326-6266. Or email your questions ahead of time (specify they are for Keith) to [email protected]

Back next week

I’m out of the office on business, but will be back next week with new blogs. This blog will be my only entry this week.