Eoin Treacy's view The Index is currently testing the upper side of the more than three-year range and has held a progression of higher reaction lows for a year. It would need to sustain a move below 150 to question potential for a successful upward break. Against a background where investors are expressing renewed interest in the financial sector I thought it would be instructive to highlight related shares which are currently outperforming.

Wells Fargo hit a new 3-year high last week and a clear downward dynamic would be required to check medium-term scope for additional upside. Capital One Financial and American Capital Strategies share a similar chart pattern. M&T Bank has returned to test the upper side of the two-year range and a sustained move above $90 would signal a return to medium-term demand dominance.

U.S. Bancorp found support in the region of the upper side of the underlying range in June and has since moved to new highs. A sustained move below the 200-day MA, currently near $30 would be required to question medium-term scope for additional upside. American Express has been ranging above the 2011 congestion area since March and a sustained move below $53 would be required to question medium-term scope for additional upside. Mastercard continues to consolidate above the 200-day MA and a sustained move below it would be required to question the consistency of the medium-term uptrend.

Discover Financial continues to hit new highs and while it is becoming increasingly overextended relative to the 200-day MA, a sustained move below $32 would be required to question medium-term scope for additional upside. Visa has a similar pattern.


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