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Dec. 13, 2016, 4:32 p.m. EST

Time to cash in your bank stocks, going by this chart

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By Victor Reklaitis, MarketWatch


Getty Images
Game over for the rally in bank stocks?

The 20,000 mark is acting like a magnet again on the dogged Dow, confounding all those who keep saying “Whoa, there!”

Yet the rein-it-in crowd is digging in its heels, even as stock futures point to another record-setting day.

Investors have been embracing change and cheering the U.S. election, the U.K.’s Brexit vote and Italy’s referendum—but their glee might not last, suggests Ameriprise Financial’s David Joy.

“Time will tell if such self-satisfaction will persist, or whether it evolves into a case of buyer’s remorse,” the strategist writes .

Our call of the day is also downbeat, saying it’s time to ditch bank stocks, those key leaders in the Trump rally.

Following a “near-vertical move in oh-so-many financial stocks,” it’s time to trim your position if you’ve bet on this sector, argues Cornerstone Macro’s Carter Braxton Worth. Don’t chase financials /zigman2/quotes/209660484/composite XLF -0.52% if you weren’t wagering that much on them, and stay short if you’ve been betting against the sector, he says.

Worth uses charts like the one below to make his case. It shows how the Nasdaq Bank Index /zigman2/quotes/210598341/realtime BANK -1.69%  has been living 29.2% beyond its 150-day moving average.


Cornerstone Macro

Up until now, that gauge for banks had never in its history traded more than 25% above this “smoothing mechanism,” the technical analyst writes in a note. “Trimming makes sense we’d say. Sell all? Also reasonable, to our eye.”

In October, Worth offered a similar argument for selling Nvidia /zigman2/quotes/200467500/composite NVDA +1.53%  that hasn’t worked out at all, as the highflying tech stock just keeps climbing. But at least he’s not alone with his call on banks /zigman2/quotes/201006419/composite KBE -1.33% . Other analysts are also warning the rally has gone too far (though bulls argue there is still room to run ).

What could keep climbing? Our chart of the day below highlights the bullish buzz around airlines /zigman2/quotes/207744796/composite JETS -0.09% .

Key market gauges

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.62% , S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.33%  and Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.08% all were trading higher, after the Dow closed at a record Monday. See the Market Snapshot column for the latest action.

The chart


MKM

Airline stocks /zigman2/quotes/210598447/delayed XX:XAL +0.06% “continue to fly,” says Jonathan Krinsky, chief market technician at MKM Partners, in a note. They may be due for a pause in the short term, but overall they are climbing after moving largely sideways and lower for 16 years, he says.

J. Lyons Fund Management’s Dana Lyons is also sounding chipper about carriers /zigman2/quotes/210598990/realtime XX:DJUSAR -0.11% . There is bullish potential for airlines, and no shortage of applicable puns (think “ready for takeoff” or “blue skies above”), he writes .

The buzz


Getty Images
A person walks past the Pilsner Urquell logo at a brewery.

In a $7.8 billion deal, Anheuser-Busch InBev /zigman2/quotes/209225053/composite BUD -1.51%  plans to sell Pilsner Urquell and other European beer brands to Japan’s Asahi Group, which previously bought Peroni and Grolsch.

/zigman2/quotes/209660484/composite
US : U.S.: NYSE Arca
$ 28.51
-0.15 -0.52%
Volume: 14.90M
Nov. 25, 2020 11:51a
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/zigman2/quotes/210598341/realtime
US : U.S.: Nasdaq
3,431.42
-59.03 -1.69%
Volume: 18,056
Nov. 25, 2020 11:51a
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/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 526.22
+7.91 +1.53%
Volume: 3.11M
Nov. 25, 2020 11:51a
P/E Ratio
86.47
Dividend Yield
0.12%
Market Cap
$320.83 billion
Rev. per Employee
$792,595
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/zigman2/quotes/201006419/composite
US : U.S.: NYSE Arca
$ 40.53
-0.55 -1.33%
Volume: 869,844
Nov. 25, 2020 11:51a
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/zigman2/quotes/207744796/composite
US : U.S.: NYSE Arca
$ 22.54
-0.02 -0.09%
Volume: 2.87M
Nov. 25, 2020 11:51a
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
29,860.09
-186.15 -0.62%
Volume: 127.51M
Nov. 25, 2020 11:51a
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/zigman2/quotes/210599714/realtime
US : S&P US
3,623.32
-12.09 -0.33%
Volume: 955.07M
Nov. 25, 2020 11:51a
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
12,046.06
+9.28 +0.08%
Volume: 2.16M
Nov. 25, 2020 11:51a
loading...
/zigman2/quotes/210598447/delayed
XX : ICE Gib Ind
81.36
+0.05 +0.06%
Volume: 0.00
Nov. 25, 2020 11:36a
loading...
/zigman2/quotes/210598990/realtime
XX : Dow Jones Global
188.30
-0.21 -0.11%
Volume: 90.82M
Nov. 25, 2020 11:51a
loading...
/zigman2/quotes/209225053/composite
US : U.S.: NYSE
$ 67.85
-1.04 -1.51%
Volume: 378,292
Nov. 25, 2020 11:50a
P/E Ratio
N/A
Dividend Yield
1.58%
Market Cap
$135.08 billion
Rev. per Employee
$316,102
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