Overview of KRE
The SPDR S&P Regional Banking ETF (KRE) seeks to track the performance of the S&P Regional Banks Select Industry Index. This ETF particularly targets regional banks in the United States. Its top holdings are Bank of the Ozarks (OZRK), Western Alliance Bancorporation (WAL), BBCN Bancorp (BBCN), Home BancShares (HOMB), and Simmons First National Corporation Class A (SFNC).
As of November 11, KRE had a market capitalization of $2.6 billion. Shares of KRE have gained 11.4% during the year so far and 8.0% in the past month. During the year, regional banks have outperformed the overall financial sector. The US financial sector (XLF) has faced headwinds during the year as the Federal Reserve has been delaying a rate hike. However, after the positive jobs report on November 6, experts assigned a 70% probability to a rate hike in December, bringing some optimism to the sector.
Moving average analysis
On November 6, KRE closed at $45.93, above its 100-day moving average of $40.38, its 50-day moving average of $41.45, and its 20-day moving average of $42.64. The chart below shows that KRE crossed above its 20-day moving average on October 23, signaling a “buy.” Regional bank ETFs have led overall financial sector ETFs, and this trend is also visible if we look at moving average crossover points.
KRE’s 14-day Relative Strength Index (or RSI) was 64.8 on November 6. The RSI for KRE has improved from 38.25 on September 4, 2015, when global stock markets plunged following the devaluation of the yuan. An RSI figure below 30 is an indication of an oversold stock while an RSI above 70 denotes an overbought stock.