Sector Analysis 02 December 2012

Added on by StockMarketStudent.

by Steve Auger

Last week ended turned out to be very bullish, primarily due to rumors of fiscal cliff compromises so it was a good thing that most of the sector plays were sidelined.  This week is very difficult to read, primarily due to the major move upward in all the sectors.  Whether this movement can continue without stalling remains to be seen. 

The following is this week's ETF sector analysis of the DJ symbols IYZ, IYW, IYT, IYM, IYK, IYJ, IYH, IYF, IYE, IYC and IDU.

Caution (yellow light)

iShares DJ US Telecom

ETF Symbol: IYZ

Stock chart of iShares DJ US Telecom showing technical analysis There was a run-up in DJ US Telecom last week, breaking out of a descending channel.  It is unclear where this ETF is headed this week and it is best to stay on the sidelines until a good signal can be found.

Sell ETF (red light)

iShares DJ US Technology

ETF Symbol: IYW

Stock chart of iShares DJ US Technology showing technical analysis DJ US Technology - I'm really sticking my neck out with this reading.  There was a breakout from a descending channel similar to US Telecom (IYZ) but it appears that for US Technology there is limited upside potential.  And unlike Telecom, IYW is still below the 200 day Simple Moving Average (SMA).  Look for the price to fall down to the upper trend line of the descending channel.  Place a protective stop at $72.25.

Caution (yellow light)

iShares DJ Transportation Average

ETF Symbol: IYT

iShares Dow Jones Transportation Average IYT stock chart showing technical analysis DJ Transportation Average had a good upward move last week and pierced the 200 day SMA and then retraced back to finish the week at the SMA.  It looks like there is some more room to move up until it hits resistance at $92.4.  However it is not worth jumping in at this point.

Sell ETF (red light)

iShares DJ US Basic Materials

ETF Symbol: IYM

iShares DJ US Basic Materials stock chart showing technical analysis

DJ US Basic Materials had a bullish week but the short position was not stopped out.   The price broke out of the descending channel, normally a bullish indicator, but it doesn't seem likely that there will be much upward movement from here.  Keep the protective stop at $67.75.

Buy ETF (green light)

iShares DJ US Consumer Goods

ETF Symbol: IYK

iShares Dow Jones US Consumer Goods stock chart showing technical analysis

DJ US Consumer Goods  - The strength of this ETF over the last two weeks has been phenomenal.  The price is sitting just above a resistance level derived from a previous major peak.  Let's go long here with a loose protective stop at $75.  There will likely be a small pullback early this week and we don't want to get stopped out in the middle of this bull run.

Caution (yellow light)

iShares DJ US Industrials

ETF Symbol: IYJ

iShares DJ US Industrial stock chart showing technical analysis DJ US Industrials  - stay on the sidelines as this ETF is range-bound.

 

Caution (yellow light)

iShares DJ US Healthcare

ETF Symbol: IYH

iShares DJ US Healthcare stock chart showing technical analysis

DJ US Healthcare - This ETF will likely continue up to $85 before hitting resistance  Not worth playing as the risk versus reward is not good.

 

Sell ETF (red light)

iShares DJ US Financial

ETF Symbol: IYF

iShares DJ US Financial Sector stock chart showing technical analysis

DJ US Financial - This looks like a good shorting opportunity as the price is butted up against a bearish trend line.  The ETF should drop down to the support level.  Place a protective stop at $59.50.

Caution (yellow light)

iShares DJ US Energy

ETF Symbol: IYE

iShares DJ Energy stock chart showing technical analysis

DJ US Energy - stay on the sidelines as there is no clear signal

 

 

Caution (yellow light)

 iShares DJ US Consumer Services

ETF Symbol: IYC

iShares DJ US Consumer Services stock chart showing technical analysis

DJ US Consumer Services  - stay on the sidelines as there is no clear signal.

 

 

Caution (yellow light)

iShares DJ US Utilities

ETF Symbol: IDU

iShares DJ US Utilities stock chart showing technical analysis

DJ US Utilities  - Utilities had a very good week and the price is now at a resistance level.  This would imply that there will be a reversal.  However the OBV is very bullish. Since there are conflicting signals it is best to stay on the sidelines.

Sector Inspector's Sign Language

Sell ETF (red light)

- Sell short,continue to hold a short position or close long position

Caution (yellow light)

- Do not initiate a new position

Buy ETF (green light)

- Go long, continue to hold a long position

Technical Analysis Terminology

resistance level support level  trend line  descending triangle   symmetrical triangle  ascending channel  Williams%R

Disclosure:  The author "Walks the walk" in addition to "Talking the Talk".