Shares of the asset manager T. Rowe Price (TROW), after having traded sideways since November, have moved very close to their three-year trendline. This support line currently terminates at $78.86, which doesn’t leave much wiggle room from the stock’s Wednesday close of $80.41.
In the brokerage sector, TD Ameritrade Holding (AMTD) is sitting right at both support and its 200-day moving average, meaning that the stock has fallen as far as it can before breaking down:
Finally, we have insurance stock Aflac (AFL). Fundamentally, Aflac stock looks good: Earnings estimates are rising, the dividend is 2.4%, and its P/E is just 9.5 times forward earnings. However, the technicals are telling a different story. AFL is testing support at $60.50, and it is doing so under its 200-day moving average and in the wake of a “death cross” (in other words, its 50-day moving average moving below its 200-day).
All is not lost, however. The small SPDR S&P Insurance ETF (KIE) has printed a nicely bullish chart. While few of the fund’s underlying holdings have the same look as KIE itself, a breakout above its 52-week high of $63.28 would be a positive sign for insurance stocks — and perhaps the financial sector as a whole.
Investors should continue to watch financials closer to see whether they break support or manage to hold their ground.
As of this writing, Daniel Putnam did not hold a position in any of the aforementioned securities.