The SPDR S&P Regional Bank ETF's (KRE) 52-week high is $41.97. On Monday, on a basically down day for the major averages, KRE managed to tick up in price to within $0.20 of quietly making a new 52-week high. Given the fact that interest rates are creeping up, regional banks could soon find themselves supported both by fund managers and the press. After all, nothing makes for better business news stories than a sector that's fighting its way toward greater profits, and then earning some respect in the investing world for its efforts.
Regional banks (and bigger ones) like rising interest rates, as a higher rate environment makes for higher bank profits. Keep in mind that the regional banks have been painted with the same ugly brush as the major banks have during this long period of the financial press reporting on the plight of the overall industry. All the while, they have continued to quietly improve both their balance sheets and income statements. Yet any bad news for the banking sector is more for the press to feast upon, and bad news has a wicked tendency to hurt a bullishly-biased trade.
KRE trades at a PE of 15X, while yielding 1.7% as per its annual dividend's rate of return. Banks have a nice habit of raising dividends as their balance sheets and income statements improve. That in turn tends to increase the stock prices of banks.
Technically, KRE has a bullishly rising one-year stochastic that is confirmed by a bullishly rising RSI. And KRE is less than a point from breaking out of resistance levels ($42) that have not been penetrated since 2007.