The banks got banged up this week.
The XLF financial ETF hit its lowest level in 13 months, while the KBE bank ETF tracked for its worst monthly loss since August 2011. Major banks JPMorgan, Citigroup, Goldman Sachs, Wells Fargo and Bank of America are all sharply lower over the past three months.
The steep sell-offs have one market watcher changing his mind on the sector.
"I've been quite negative on the group all of this year until now," Matt Maley, equity strategist at Miller Tabak, told CNBC's "Trading Nation" on Wednesday. "You look at either the KBE or the KRE, its weekly RSI [relative strength index] chart is getting very oversold. In fact, the last three times it got this extreme, the group bounced very sharply."
The KBE bank ETF has a relative strength index reading of 17, its lowest level since early 2016. Over the following year, the ETF surged 79 percent. The KRE regional bank ETF experienced a similar move in 2011 when it rallied 64 percent in the year after it got to extreme oversold levels.