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 5th. 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.
8 Comments
I believe ZBK is the unhedged version of ZUB and ZWB is the covered call version of ZEB.
Got it~!
Hi Keith:
Is the non-hedged version of ZUB not ZBK instead of ZWB as indicated in your blog?
Your blogs are very informative.
Thanks
John
Thanks John–lots of readers got this boo-boo!
Hi Keith:
Terrific blog that is read weekly. The unhedged US banks ETF with BMO is ZBK.
Thanks Terry–noted and changed!
Keith, non-hedged version of the US Bank ETF is ZBK (vs ZWB) to my knowledge. ZWB is covered call Canada banking ETF. Thanks for your analysis and guidance, as always.
Thanks Omer–my boo-boo