One of the most important sectors of the stock market is the banking industry and bank stocks.

When the banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, then it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. As well, the banks have been lagging the broader market during this time as well – see the Ratio in the bottom half of the chart above.

That said, the Bank Index has put together a short-term rally that is threatening to break out of these falling trend channels.

If dual breakouts take place, a strong bullish message would be sent to the banking sector, as well as the broader market!

(Click on image to enlarge)