Boston Private Financial Holdings, Inc. (NASDAQ:BPFH)

CAPS Rating: 5 out of 5

A wealth management company, which offers financial services to individuals, families, businesses, and select institutions.


Player Avatar TMFEnochRoot (99.77) Submitted: 6/18/2008 11:15:03 AM : Outperform Start Price: $5.96 BPFH Score: +8.43

Fourth time around at this, man these financials are a tough bunch. I had reviously been testing the BKX index constituents, but since I already have an active position under testing, I looked to other banking indexes to see if a similar test can be performed today. This is the 11th day in 2008 the trigger has been tripped on the BKX, but only the second time for the KRE index, which contains a more diversified list of constituents and who, as a group, haven't seen their capital ratios affected quite as dramatically (as consequerntly have not undergone quite as severe a shellacking necessitating capital raises as the bigger BKX names.)

Now the decline been so bad in the regional bank group that the KRX Index is now 24% under its 200-day moving average.

Unfortunately, the index itself does not have a long enough history to test how prior period reactions to this level of a selloff, but the BKX index does. with regard to the BKX, that's an extraordinarily large spread that has been seen only five other times in its history - 10/7/98, 7/23/02, 10/7/02, 1/6/08, and 3/10/08. All were within a day of a major low and a month later the index was higher by +33%, +25%, 28%, 11%, and 7% respectively.

So now I am using CAPS to track the KRX constituents over the next month in addition to my previously placed BKX bets, to see if this historical technical pattern will hold for the regional banks as it has so far for the major banks.

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