Key bank stocks and financial powerhouses, including JPMorgan Chase (JPM), Goldman Sachs (GS), Wells Fargo (WFC), Bank of America (BAC), and Warren Buffett’s Berkshire Hathaway (BRKB), are currently in or nearing fresh buy zones. These firms are also key components of the Financial Select Sector SPDR (XLF) exchange-traded fund, which has recently been highlighted on the IBD Leaderboard.
Investment Opportunity through XLF ETF
Investors looking to gain exposure to these leading financial institutions can consider the XLF ETF, which includes top holdings such as JPMorgan, Goldman, Berkshire Hathaway, Mastercard (MA), and Visa (V). As JPMorgan and Berkshire Hathaway enter bullish buy ranges, the XLF ETF has also followed suit, reflecting the overall strength in the financial sector.
Positive Trends and Stress Test Success
JPMorgan was recently featured in IBD’s Stock Analysis, showcasing its strong performance trends. In late June, the Federal Reserve announced that all 23 major banks, including JPMorgan, Goldman Sachs, Bank of America, and Wells Fargo, had passed their stress tests. This positive outcome allowed these banks to increase their dividends, further boosting investor confidence.
XLF ETF and Rising Relative Strength
In mid-July, the XLF ETF broke through a 42.49 buy point in an early stage flat base. As it formed the right side of this pattern, its relative strength line surged, nearing a 52-week high. This bullish momentum is mirrored by the actions of major holdings like Berkshire Hathaway, JPMorgan, and Goldman Sachs.
Warren Buffett’s Berkshire Hathaway formed and cleared an early stage flat base, with its RS line also climbing. Berkshire recently cleared a 430 entry point and closed Monday 2% above this initial entry. Similarly, Wells Fargo is working on a new base with a 62.55 entry, while JPMorgan remains in its buy range. Although Goldman Sachs eased back on Monday, it still trades at the top of its buy range.
Upcoming Earnings Reports
Many of the major banks within the XLF ETF have already reported their second-quarter earnings. However, investors are looking forward to Berkshire Hathaway’s earnings report, scheduled for August 5. This report will provide further insights into the performance of Warren Buffett’s insurance and financial conglomerate.
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