‘Washed Out’ Banks Best Buy Pre Mid-Terms: Analyst

This Level of Overselling Likely to Result in Double Digit Rally. Bank stocks have been hit hard by the recent global sell-off, underperforming the broader market despite potential upside from rising interests’ rates and strong earnings. This week, the XLF financial ETF fell to a 13 month low, while the KBE bank ETF tracked for its worst monthly loss in over seven years. Banks including JPMorgan Chase & Co. (JPM), Citigroup (C), Goldman Sachs, (GS), Wells Fargo Corp. (WFC) and Bank of America (BAC) led the downward spiral, all sharply lower over the recent three-month period. In light of the recent selling, Matt Maley of Miller Tabak has turned bullish on the sector at large, despite being "quite negative on the group all of this year until now." In an interview with CNBC's Trading Nation on Wednesday, the equity strategist pointing to technicals for both the KBE and the KRE regional bank ETF, indicating that the weekly relative strength index (RSI) charts are "getting very oversold." He noted that the last three times selling was this extreme, "the group bounced bank very sharply."