Sector Analysis 01 April 2012
/Sector Analysis Summary
The telecom, transportation, industrial, financials, energy sectors appear weak this week. The remainder of the sectors look pretty strong.
iShares DJ US Telecom
ETF Symbol: IYZ
DJ US Telecom dropped in price last week but is trading in the middle of an ascending channel. IYZ will likely retreat to the lower trend line on the chart $21.90 - OBV bearish divergence and possible Williams%R retreating to -80 (trending). Longer term this ETF will probably follow the general market. I suggest sitting on the sidelines until a clearer pattern is established.
iShares DJ US Technology
ETF Symbol: IYW
DJ US Technology is still trading within an ascending channel. IYW is now close to the lower trend line and represents a good buying opportunity. A protective stop should be placed below the support level shown on the chart.
iShares DJ Transportation Average
ETF Symbol: IYT
Although the DJ Transportation Average has formed an ascending triangle, which is normally bullish, the bearish On-Balance Volume divergence appears ominous. I have to keep the red light signal on for this week.
iShares DJ US Basic Materials
ETF Symbol: IYM
DJ US Basic Materials traded sideways last week and is trading within a horizontal channel. The On-Balance Volume is showing bullish divergence but let's wait for a breakout from the channel. Place a buy Stop at $72.25.
iShares DJ US Consumer Goods
ETF Symbol: IYK
DJ US Consumer Goods was up last week and is still trading within an ascending channel. The status of this ETF remains green light with a protective stop below the support level shown on the chart.
iShares DJ US Industrial
ETF Symbol: IYJ
DJ US Industrial was up (slightly) last week and came close to touching the lower trend line of the Ascending Channel. IYJ is sitting a a support level and also trading within a small symmetrical triangle. IYJ could break either way but the bearish divergence with the On-Balance Volume appears ominous. If the ETF breaks below the support level shown on the chart then this will be a good short term short position play.
iShares DJ US Healthcare
ETF Symbol: IYH
DJ US Healthcare continues to impress. Keep the long position while respecting the support level shown on the chart.
iShares DJ US Financial
ETF Symbol: IYF
DJ US Financial was up slightly last week. The On Balance Volume is still exhibiting bearish divergence. Stay on the sidelines but look for a possible breakdown.
iShares DJ US Energy
ETF Symbol: IYE
DJ US Energy still appears to be negative. Aggressive traders should short the IYE with a very tight protective stop above the resistance level shown on the chart.
iShares DJ US Consumer Services
ETF Symbol: IYC
DJ US Consumer Services, like IYK Consumer Goods, managed to stay within its ascending channel and support level. The status of this ETF remains green light with a protective stop below the lower trend line.
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iShares DJ US Utilities
ETF Symbol: IDU
DJ US Utilities has formed an ascending channel. The On-Balance Volume is showing bullish divergence. This is a long position, long term play. Place a protective stop below the lower trend line.
Disclosure: The author "Walks the walk" in addition to "Talking the Talk".
