Overview of KBE
The SPDR S&P Bank ETF (KBE) seeks to track the returns on the S&P Banks Select Industry Index. The fund has a market capitalization of $2.6 billion as of January 5, 2016, and a trading volume of $2.9 million shares. Additionally, the fund invests in a portfolio of publicly traded money centers and leading regional banks. Approximately 80% of its holdings are concentrated in regional banks. Also, its largest holdings are Bank of the Ozarks (OZRK), Western Alliance Bancorporation (WAL), Cullen/Frost Bankers (CFR), First Niagara Financial Group (FNF), and Fulton Financial (FULT). These have weights of 1.9%, 1.9%, 1.8%, 1.8%, and 1.8%, respectively, in the KBE ETF.
Moving average analysis
On January 5, 2016, KBE closed at $33.0, or below its 100-day, 50-day, and 20-day moving averages of $34.4, $35.1, and $34.1, respectively. The chart above shows that KBE has crossed below its 100-day moving average on December 29, 2015. Currently, the ETF trades below all of its moving averages. It’s also clear that the 20-day moving average crossed below the 100-day moving average last week. Technical analysts view this as a bearish signal.
The 14-day RSI (Relative Strength Index) for the KBE ETF is 36 as of January 5, 2016. This suggests that the ETF is nearing oversold levels and may be considered undervalued. An RSI figure below 30 is an indication of an oversold stock while an RSI above 70 denotes an overbought stock.