The Financial Select Sector SPDR Fund, also known as the XLF ETF, is the IBD Stock Of The Day for Friday. Shares of the ETF are trading in a buy zone while financial stocks are trending higher on quarterly results.
The XLF ETF offers exposure to a number of top U.S. financial companies in the S&P 500, weighted by market cap.
The fund's top holdings include Berkshire Hathaway, JPMorgan Chase, Visa, Mastercard, Bank of America, Wells Fargo and Morgan Stanley.
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As of Jan. 31, Berkshire Hathaway represented 11.96% of the XLF ETF portfolio, followed by JPMorgan at 10.66%. Visa and Mastercard holdings accounted for 8.2% and 6.4% of the portfolio, respectively, according to FactSet.
Meanwhile, the XLF ETF has climbed about 11% off its mid-January lows as its holdings power higher on earnings and momentum from the Trump administration.
Mastercard, Visa, Morgan Stanley and JPMorgan are all trading at record highs after reporting results last month. Bank of America stock is right at multiyear highs, in a buy zone. Berkshire stock is in a base, above an early entry.
Financials are benefitting from hopes for an easier regulatory environment, with banks rallying on a positive yield curve and strong capital markets.
XLF ETF Chart
Shares of the Financial Select Sector Fund are trading in a buy zone, above a 51.62 buy point for an eight-week cup base.
The buy zone, which stretches 5% beyond the buy point, extends to 54.20.
XLF ETF has trended higher since Jan. 13 and has been holding support above its 50-day line.
The relative strength line, which tracks a stock or ETF's performance vs. the S&P 500 index, is at a 52-week high, but has generally drifted lower since 2017 or even 2007.
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