Wagner Daily Lite for March 13, 2012 – Is ($KBE) Primed to Pop?

Stocks closed mixed on Monday as volume waned. Large cap issues outperformed as the Dow Jones Industrial Average closed up 0.3%. The S&P 500 closed fractionally higher, while the Nasdaq, S&P MidCap 400 and small-cap Russell 2000 slid 0.2%, 0.4% and 0.3% respectively. Specialty finance and Utilities were the best performing sectors, while coal, precious metals and oil services were the day’s underachievers. Overall, it was a quiet session.

For the fourth time in as many days, market internals were mixed. Volume declined on the Nasdaq by almost 15.0% and on the NYSE by 10.7%. Declining volume held the upper hand on both exchanges. The ratio of advancing volume to declining volume ended the session at minus 1.5 to 1 on the NYSE and minus 1.8 to 1 on the Nasdaq. For a second straight day, institutions were absent from the market.

Over the past six weeks the SPDR S&P Bank ETF (KBE) has tested resistance near $22.60 on three separate occasions. Since testing support at the 50-day MA on March 6th, KBE has rallied to reclaim its 10-day and 20-day moving averages. A move above the two day high of $22.62 would be the fourth test of this key resistance level and could result in a buying opportunity in KBE.

Since testing support of its 20-day EMA on March 6th and 7th, the DB Commodity Index Tracking Fund has been consolidating just above this key mark for the past three sessions. A volume assited move above last Friday’s high of $29.43 could provide a buy entry trigger for this ETF.

The commentary above is an excerpt from our nightly Wagner Daily newsletter. Subscribing members receive detailed entry and exit prices for our swing trade setups, additional annotated ETF and stock charts, technical market commentary, and access to our Live Trading Room. Click here to become a member for as low as $58 per month. Your full satisfaction is guaranteed.