Energy Select Sector SPDR Fund (XLE) – Two bullish events hve recently unfolded, which allow for an overweight allocation. This first was the ability to find support at the botom of a large descending triagle on the relative strength chart. The second was the technical breakout of an ascending triangle on the price chart. In order to protect profits, initial support rises to the breakout level near 80. To the upside, XLE now has its sights on the 90-91.50 range.
Industrial Select Sector SPDR Fund (XLI) – Two bullish events have recently unfolded, which allow for an overweight allocation. This first was the ability to find support at the bottom of a large descending triangle on the relative strength chart. The second was the technical breakout of an ascending triangle on the price chart. In order to protect profits, initial support rises to the breakout level near 80. To the upside, XLE now has its sights on the 90-91.50 range.
Utilities Select Sector SPDR Fund (XLU) – Over the last month or so XLU has gone from overbought to oversold. In the process there has been technical damage to the chart. For instance, last week’s negative outside week and the head ad shoulders top breakdown suggest further price weakness. There was also a relative strength breakdown. Therefore, until the damage has been repaired, bounces should be view as unsustainable. [Utilities ETFs Showing Signs of Wear]
Materials Select Sector SPDR Fund (XLB) – From a relative strength perspective XLB needs to clear its Mar 2013 breakdown level to repair the technical damage. The 5/22/13 negative outside day and the 5/24/13 negative outside week are signaling that some kind of correction is in order. Looking out a little longer-term and the failure to clear the May 2013 high could form the second half of a head and shoulders top. Neckline resides near 37-37.35.
iShares Dow Jones US Telecom Index (IYZ) – IYZ touched upon its Jun 2008 high (27.50) before a 5/22/13 negative outside day and a 5/24/13 negative outside week formed and profit taking arose. From a relative strength perspective it also appears that IYZ has broken own from a head and shoulders top. Initial support remains at the Apr 2013 breakout level near 26-26.25. Failure to maintain support allows for a move towards the 4/17/13 low (25.35).
J. Beck Investments is an independent provider of technical research for ETFs.