Sector Analysis 11 March 2012

Added on by StockMarketStudent.

by Steve Auger

Sector Analysis Summary

To say the least, things didn't go well last week.  Most of the sector ETFs dropped out of ascending channels or breached support levels.  Given that Basic Materials, Transportation and Industrials are looking bearish, it is likely that we are seeing the resurrection of a bear market.  However, this could all change with the mood of the market.  Bullish news could turn everything around.

ETF Trading System

Cation (yellow light)

iShares DJ US Telecom

ETF Symbol: IYZ

Stock chart of iShares DJ US Telecom showing technical analysis for March 11, 2012DJ US Telecom pulled back early last week, dropping below the upward trend line and causing my (personal) position to be stopped out.  Then IYZ had three up days in a row, ending the week in positive territory.  It is difficult to say where the price of this ETF is going from here.  It is still trading below the near term high and will likely experience resistance above the current price.  In all probability the ETF will fall back to the trend line aned/or support level shown on the graph.  In short, we need to wait for a new pattern to form.   


Cation (yellow light)

iShares DJ US Technology

ETF Symbol: IYW

Stock chart of iShares DJ US Technology showing technical analysis for March 11, 2012 DJ US Technology price action was similar to IYZ - US Telecom.  My personal position was stopped out when the ETF price fell out of the ascending channel.  The price has since moved back up to sit at short term resistance and is now trading in a horizontal channel.  After a three day rise there will likely be a pull-back from here. 

 

Sell ETF (red light)

iShares DJ Transportation Average

ETF Symbol: IYT

iShares Dow Jones Transportation Average IYT stock chart showing technical analysis for March 11, 2012

DJ Transportation Average trend is down.  A descending triangle has formed which is quite bearish.



Sell ETF (red light)

iShares DJ US Basic Materials

ETF Symbol: IYM

iShares DJ US Basic Materials stock chart showing technical analysis for March 11, 2012

If IYT (DJ Transportation) was bad then the DJ US Basic Materials chart is terrible.  The ETF price has bounced back to a long term resistance level but should drop from there.

 

Buy ETF (green light)

iShares DJ US Consumer Goods

ETF Symbol: IYK

iShares Dow Jones US Consumer Goods stock chart showing technical analysis for March 11, 2012

DJ US Consumer Goods is one of the few stocks that stayed within its ascending channel.  The support level was not breached and the status of this ETF remains green light. 

 

Sell ETF (red light)

iShares DJ US Industrial

ETF Symbol: IYJ

iShares DJ US Industrial stock chart showing technical analysis for March 11, 2012

DJ US Industrial appears to be positioned to start moving down again.  This ETF remains red light.

 

 

Cation (yellow light)

iShares DJ US Healthcare

ETF Symbol: IYH

iShares DJ US Healthcare stock chart showing technical analysis for March 11, 2012

DJ US Healthcare is trading in a horizontal channel, currently at the upper channel resistance line.  This ETF will likely continue trading within the channel, falling in the short term.  But this depends on the overall market this coming week.



Cation (yellow light)

iShares DJ US Financial

ETF Symbol: IYF

iShares DJ US Financial Sector stock chart showing technical analysis for March 11, 2012

DJ US Financial dropped out of the ascending channel and is now sitting at a local resistance level.  Given the bearish On Balance Volume divergence, the ETF price will likely drop down to the support level shown on the chart.



Cation (yellow light)

iShares DJ US Energy

ETF Symbol: IYE

iShares DJ Energy stock chart showing technical analysis for March 11, 2012

DJ US Energy dropped out of the ascending channel and looks pretty bearish.  But there are plenty of support levels below the current price that should keep it afloat.  The price of this ETF won't be going far in the short term.



Buy ETF (green light)

 iShares DJ US Consumer Services

ETF Symbol: IYC

iShares DJ US Consumer Services stock chart showing technical analysis for March 11, 2012

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.

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Buy ETF (green light)

iShares DJ US Utilities

ETF Symbol: IDU

iShares DJ US Utilities stock chart showing technical analysis for March 11, 2012

DJ US Utilities has now formed a horizontal channel.  The price of this ETF will likely drop from here, based on the OBV bearish divergence and local resistance.



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