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.

 

ssec-aug-29-2016

 

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.

 

zub

 

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