{"id":24036,"date":"2025-05-20T07:30:00","date_gmt":"2025-05-20T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=24036"},"modified":"2025-08-21T10:32:35","modified_gmt":"2025-08-21T14:32:35","slug":"bank-stocks-rallied-25-take-profits-now","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/bank-stocks-rallied-25-take-profits-now\/","title":{"rendered":"Bank Stocks Rallied 25% \u2013 Take Profits Now"},"content":{"rendered":"\n

It\u2019s time to sell the banks.<\/p>\n\n\n\n

The last time we wrote about the banking sector was in early April<\/a>. Back then, bank stocks had been selling off hard, along with the broad stock market. But the chart of the KBW Nasdaq Bank Index (BKX) was showing signs of a potential reversal. And with earnings season coming up, we figured bank stocks might be setting up for a rally.<\/p>\n\n\n\n\n

Since then, bank stocks have been on fire. The sector has led the market higher over the past six weeks. BKX is up nearly 25% since early April.<\/p>\n\n\n\n

Now, though, the sector is overbought. And the Bullish Percent Index for the Financial Sector (BPFINA) is about to generate its first sell signal of 2025.<\/p>\n\n\n\n

Look at this chart of BPFINA\u2026<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

A bullish percent index (BPI) shows the percentage of stocks in a sector that are trading in bullish technical patterns.<\/p>\n\n\n\n

It\u2019s an easy way to measure overbought and oversold conditions for a sector. Typically, a reading above 80 \u2013 meaning 80% of the stocks are trading in bullish technical patterns \u2013 means a sector is overbought. Readings below 30 indicate oversold conditions.<\/p>\n\n\n\n

Buy and sell signals occur when a BPI reaches extreme levels and then reverses.<\/p>\n\n\n\n

For example, when a BPI rallies above 80 and then turns lower, it generates a sell signal. When a BPI dips below 30 and then turns higher, that\u2019s usually time to buy. At least, those are the general rules.<\/p>\n\n\n\n

The last BPFINA sell signal occurred back in December. The KBW Nasdaq Bank Index (BKX) was trading near $135 at the time. Over the next four months, BKX fell all the way to $105 before the BPFINA turned higher from oversold conditions and generated a buy signal.<\/p>\n\n\n\n

Today, the banking sector is back to where it was trading last December. And BPFINA is once again in overbought territory and on the verge of generating a sell signal.<\/p>\n\n\n\n

Yes, it\u2019s possible for BPFINA to work even higher. Overbought conditions can always get more overbought.<\/p>\n\n\n\n

But with the broad stock market looking vulnerable to a pullback, and with the banking sector in overbought territory, it\u2019s probably a good idea to take some profits off the table.<\/p>\n\n\n\n\n

Traders who bought bank stocks on our suggestion in early April should consider selling them now.<\/p>\n\n\n\n

Best regards and good trading,<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Jeff Clark
Editor, Market Minute<\/em><\/p>\n\n

\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

Bank stocks have been on fire. Now, though, the sector is overbought.<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-24036","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24036","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=24036"}],"version-history":[{"count":3,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24036\/revisions"}],"predecessor-version":[{"id":24920,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24036\/revisions\/24920"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=24036"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=24036"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=24036"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=24036"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=24036"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=24036"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=24036"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}