Growth stocks and tech names like Nvidia, Tesla and Advanced Micro Devices have stumbled out of the gates to kick off 2022. But financial stocks, particularly superregional banks, have shown strength in this troubled market. In fact, 79 regional and superregional banks made IBD's latest list of new buys by the best mutual funds.
Reflecting that stock market trend and the ongoing sector rotation, the SPDR S&P Regional Banking ETF has made its way to IBD Leaderboard, which typically focuses on individual growth stocks. Nvidia, AMD and Tesla, for example, currently make the list.
But exchange traded funds, or ETFs, can help investors participate in broader trends without the risk of investing in an individual stock. With the KRE ETF, investors can participate in the moves of regional and superregional banks like SVB Financial, Signature Bank and crypto play Silvergate Capital with one trade.
See Who Joins KRE, Tesla And Nvidia On IBD Leaderboard
KRE ETF Bankrolls New Buy Zone
While AMD, Nvidia and Tesla have all fallen below their 50-day moving averages, the KRE ETF has moved above that benchmark line into a buy zone. Having cleared a flat base, the buy range is $75.86–$79.65. KRE has also cleared a trendline.
KRE's rising relative strength line reflects its current stock market leadership.
The ETF has risen as much as 184% off its coronavirus lows in March 2020. But a monthly chart shows how KRE actually has not yet made a significant advance since it took out its multiyear highs of 2018.
With the stock market under pressure and earnings season getting ready to kick in, investors should proceed with caution. If you do buy stocks in this environment, be sure to have sell rules in place to lock in profits and avoid any big losses.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
