By Doug Busch
A month ago, I highlighted the fragility in the financial sector, arguing that the broader market would struggle to make meaningful headway without its participation. Little has changed. On Monday, the group was the worst performer among the 11 major sectors, with the State Street Financial Select Sector SPDR ETF falling 3.4%, its steepest single day decline in nearly 11 months.
The weakness hasn't been confined to one session. Just two weeks ago, the ETF dropped 5% for the week, marking its worst weekly performance since early April 2025, when markets were floundering from the Liberation Day lows. The persistent underperformance, marked by seven consecutive sessions closing below the 200 day simple moving average, reinforces the concern that financials remain a key pressure point for the broader tape.
The three stocks I examined came from distinct corners of the financial landscape, far removed from the traditional money-center banks that often dominate the conversation. Let's take an updated look at where they stand now.
Blue Owl Capital, a private credit focused alternative asset manager serving institutional investors, is down more than 50% from its most recent 52-week high. The stock is in the midst of a five week losing streak, only the fourth such stretch since coming public via a SPAC merger in early 2021. It has never recorded a six-week skid and started the week with a 3.4% drop.
On the weekly chart, Blue Owl Capital completed a bearish head and shoulders pattern carved out over nearly two years. The longer the base, the more meaningful the eventual breakout, or breakdown, tends to be. Relative performance also has deteriorated since the start of 2025, with the stock lagging behind its financial peers.
Shares have now retreated toward the very round $10 level, the price at which SPACs were initially brought to market during the frenzy several years ago. That level acted as support in both 2022 and 2023, aside from a brief undercut in the second half of 2022.
Given the 26% decline from my initial bearish call, it makes sense to cover half the position here. A move toward $8, where the stock last traded in October 2022, would offer a logical area to close out the remainder of the trade.
Blue Owl was trading around $10.50 Tuesday.
PayPal, the fintech payments platform, has been on the defensive, down 45% from its most recent 52-week high, even after a 6% pop Monday on takeover speculation. The stock endured a 10 session losing streak from Jan. 23-Feb. 5, punctuated by a 20% plunge on Feb. 3 following a poorly received earnings report.
On the weekly chart, PayPal continues to lag its financial peers, over the past two years. The stock remains well below its downward sloping 50 and 200 week simple moving averages.
Technically, shares broke below a bearish head and shoulders pivot at $55 and have now reached my downside objective near $40. With that target achieved, the risk/reward dynamic shifts. A doji candle two weeks ago, followed by a failure to generate downside follow through after the prior week's 23% collapse on the heaviest weekly volume in at least five years, suggests downside momentum may be waning.
Given the stock has declined 17% from my initial bearish call and met its projected move, it makes sense to close out the position here.
PayPal was trading around $43 Tuesday.
Robinhood Markets, often viewed as a software proxy for Bitcoin, is down 53% from its most recent 52-week high set last October. The stock has lacked momentum, with its last three week winning streak occurring in June--July 2025.
A look at the daily chart shows shares down 14 of the past 19 sessions, with clear signs of distribution as heavy volume has accompanied many of the declines. Relative performance versus financial peers has continued to deteriorate since October.
Technically, the stock recently registered a bearish death cross, with the 50 day simple moving average falling below the 200 day simple moving average. It first broke beneath the 200 day in late January, a level that had acted as a powerful springboard last April, marking a notable shift in character.
The shares are down 30% since my initial bearish call and have formed a bear flag. A decisive break below the $70 pivot could see a move toward $50, implying 30% downside from current levels. Remain bearish bias below $78.
Robinhood was trading around $72 Tuesday.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 24, 2026 11:03 ET (16:03 GMT)
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