Regional bank ETF hits record ‘relative’ low, but bulls are gaining momentum

Regional bank stocks took a broad beating Monday in the wake of First Republic Bank’s failure, and continue to underperform the broader stock market by their widest margin in history, much worse than they did during the 2008-09 financial crisis.

While investors continue to reject the sector, on its own and on a relative basis, there is perhaps a technical silver lining, in the form or “bullish technical divergence,” as shown in the chart below.

The…