NEW DIRECTIONAL CALL PLAYS
SPDR KBW Bank ETF - KBE - close 24.19 change +0.09 stop 23.25
SPDR KBW Bank ETF seeks to replicate as closely as possible the performance of the KBW Bank Index (ticker BKX). The ETF invests in industries such as regional banks, diversified banks, consumer finance, thrifts and mortgage finance, asset management and custody banks, and other diversified financial services.
Target(s): 25.30, 26.00, 26.70
Key Support/Resistance Areas: To follow
Time Frame: 1 to 2 weeks
Why We Like It:
KBE has strong support in the $23.50 to $24.00 area (see rectangle on the below chart) and has printed two bottoming tail candlesticks the past two trading sessions. The ETF has formed a bullish inverse head and shoulders pattern and has maintained an upward trend line off of its July 1 lows. KBE is also being supported by its 20-day, 50-day, and 200-day SMA's which could act as a springboard for a move higher. Tomorrow's FOMC announcement is a wildcard so traders may want to see the market's reaction (or close) prior to entering positions. I like the play at current levels with a tight stop at $23.25 which is below the daily upward trend line.
Suggested Position: Buy September $24.00 CALL, current ask is $1.15 (try to enter at no more than $1.00)
Entry on August xx
Earnings Date N/A (unconfirmed)
Average Daily Volume: 3.5 million
Listed on August 9, 2010