Technical Analysis: Banks running out of steam

12th May 2009 10:56

Since March the banking sector has undergone a significant turn around in fortunes. This turnaround must be put into context of its decline since 2007. Since the peaks of 11,696.30 in February 2007 the sector has plummeted over 85% peak to trough so it was inevitable that there would be a bounce at some point. Last week I indicated that the 200 day moving average would be a key resistance level for the banking sector going forward. So far this important level has kept a top on the up move for 3 days in succession, despite the positive reaction from the results of last weeks stress tests. A failure to successfully navigate above this level could see profit-taking push the banking sector back lower towards the support line.Barclays: struggling to maintain levels above 300p, the 38.2% retracement level has remained un-tested with the highs so far at 307p. Trend line support from the lows in March currently comes in around 235p.HSBC: The 200 day average has also acted as a cap on the move higher in the share price around 580p. There is trend line support from the lows currently around 480p but there is also support around the 500p area which was the April highs. Lloyds: the highs so far from the rally from 32p have been confined to the low 120p area. It should find some semblance of support around the 80/85p area. RBS: unable to sustain the move above 50p, it fell short of the high for this year at 57.20p, and has drifted back as far as the low 40's. The support around 30p is the next key level.Standard Chartered: pushed back from, and closed below the resistance and 61.8% retracement level of 1,290p. This represents a significant pullback from the lows at 554p and its decline from the highs at 1728p. A high of 1337p was ultimately not sustainable, and the share price has since declined back to be trading around 1200p. For periodic TA updates follow me on Twitter