The Financial Sector has been strong for the past 4 months, rallying back to test its 2026 high.

This trading pattern has resulted in a very broad base that resembles a “cup” formation. This is a potentially bullish formation that often leads to a “handle” (cup with handle is the most bullish form of this basing pattern). The handle forms in a consolidation phase.

While there’s not enough price action to say a handle has formed, XLF is testing its highs and a breakout here would be bullish for the sector as well as the broader market.

Not sure if we see some further consolidation resembling a handle, but it’s safe to say that bulls should add XLF to their watch list.

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$XLF Financial Sector ETF Chart

Twitter: @andrewnyquist

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.