The banks have been sold off very heavily since peaking last month. The major cause is the falling $A where overseas investors are looking to bank profits before they become eroded by the currency translation. With the heavily oversold condition on the daily chart, and the yield support, I would expect the banks to stage a small rally here, retracing approximately 50% of the recent falls. Looking at WBC as an example, that takes it up towards $32. From there I would expect it to remain under pressure. It could either then drift back towards $29 or a worst case scenario for me would see the stock down near $26.
If you are looking to lighten off on banks, then the upcoming bounce could be your opportunity. However, if we want to hang on but protect the downside, then the bounce will give investors an opportunity to write a covered call to protect the downside. Alternatively, if you are underweight banks, you can use these levels as a buying opportunity and then write a call options against the shares once they have rallied.