Banks busting upward looking cautiously bullish, may want breakout although not quite there

A couple of weeks ago I pointed out that the banking sector was poised to head more decisively either up or down, and warned not to be complacent about which direction. Now that the banks look ready to join the "breakout party," they have been lending more support to the broader indices in moving higher. I wish I could report that they are "out of the woods" but from a chart pattern perspective, the BKX really needs to push somewhat higher to give more assurance that the lows aren't revisited anytime soon. Still, the indicators look good (see BKX chart at right), and buying volumes have picked up on the KBE exchange-traded fund (chart below).

I don't know that a massive commitment to buying this sector is the right thing to do at the moment, but there's certainly no reason I can see for doing the opposite either. It would not be unreasonable to take a positive stance, backstopped at the level that currently marks the 50-day moving average or recent swing low (really, a range of $34-37 in BKX).