Although the thesis seems logical, before putting money to work, Cramer always likes to consult the charts to see if they confirm the thesis. For insights on regional banks Cramer turned to technical analysis from Bob Lang, the founder and senior strategist at Explosive Options.net.
Looking at the chart of the KBW Regional Banking Index, Lang sees positive developments.
Not only is the regional bank index above all of its key moving averages, Lang says it continues to make higher highs and higher lows – a bullish trend. Also he says the Moving Average Convergence Divergence line is flashing a buy signal.
That seems like confirmation, but Cramer usually prefers to hold stocks of individual companies rather than a broad ETF. Therefore he asked Lang to dig down into the group and identify specific regional banks with particularly strong chart patterns.
They follow:
