SPDR S&P Bank ETF (KBE) is a widely-tracked exchange-traded fund that provides exposure to the banking sector within the S&P 500 index. As an essential component of the financial markets, KBE offers investors an opportunity to participate in the performance of leading banks and financial institutions. This article will explore the current outlook for KBE, based on the current Elliott Wave structure and potential price action for future growth.
KBE experienced a daily decline from its January 2022 peak, unfolding as a 3-wave Zigzag Structure. The initial leg, wave a, ended in July 2022, followed by a bounce in wave b, and then the decline resumed in wave c in August last year. The downside move accelerated during the March Banking crisis, and wave c reached its main target area at the blue box ($34 – $30).
The blue box on our charts represents a high-frequency area where the market is likely to end its cycle and reverse. After reaching this area, KBE began a reaction higher, initially showing 3 swings up and aiming for the equal legs area at $42 – $47. Around that region, the ETF is expected to complete the initial rally that started from May 2023 low, forming a potential 5-wave advance. Subsequently, a 3-wave pullback may occur to correct that cycle, followed by further upside.
Despite the challenges faced by the Banking sector earlier this year, the market is showing signs of recovery. Technically, the daily chart indicates a potential major low, as buyers stepped in within the extreme area, leading to a bounce for the Bank ETF.