by Steve Auger
Sector Analysis Summary
Most of the sectors being followed are breaking out of triangle formations but not with conviction. Volume is relatively light and resistance level penetration has not been particularly strong. The transportation and industrial sectors appear to be the best long entries this week. The utilities sector breakout has stalled and now appears to be breaking down. Energy appears to be on the verge of falling as well. See below for detailed sector analysis.
iShares DJ US Telecom
|ETF Symbol: IYZ
DJ US Telecom chart is exhibiting a (minor) bearish channel and attempted a breakout from a symmetrical triangle. The security price quickly dropped back to the trend line. Symmetrical triangles are neither bullish nor bearish and the ETF price could still break either way. Given the price is trading within a bearish channel and well below the 200 day simple moving average it is best to sit on the sidelines and watch for a possible price breakdown.
iShares Dow Jones Transportation Average
|ETF Symbol: IYT
DJ Transportation Average has broken out of an ascending triangle which is very bullish chart pattern. The breakout was not strong however. The ETF price is just above the 200 day moving average, a good position to be for a move upward with an initial resistance of $99 - $100.
iShares DJ US Basic Materials
iShares Dow Jones US Consumer Goods
iShares DJ US Industrial
iShares DJ US Healthcare
iShares DJ US Financial
|ETF Symbol: IYF
DJ US Financial has broken out of an ascending triangle. It won't go far before it meets resistance ($52.50) and is still well below the 200 day simple moving average. Stay on the sidelines.
iShares DJ Energy
iShares DJ US Consumer Services
iShares DJ US Utilities
Disclosure: The author currently holds a position in IYT iShares Dow Jones Transportation Average.