by Steve Auger
The election caused a great deal of turmoil last week. Most sectors dropped fairly significantly, in particular utilities and technology. I strongly believe there will be some relief this week, a short term bounce as some of the sectors are at major support levels.
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.
iShares DJ US Telecom
ETF Symbol: IYZ
iShares DJ US Technology
ETF Symbol: IYW
DJ US Technology continues to trade in the descending channel. The ETF is now at a major support level and will likely bounce here. But if this ETF drops below the support then it could end up in a free fall. I'm not expecting this (yet) but be prepared to jump on the short side.
iShares DJ Transportation Average
ETF Symbol: IYT
iShares DJ US Basic Materials
ETF Symbol: IYM
I still don't like the chart for DJ US Basic Materials. Stay on the sidelines until there is a clearer signal.
iShares DJ US Consumer Goods
ETF Symbol: IYK
DJ US Consumer Goods is trading within a descending channel, at the lower trend line. The price is also at the 200 day Simple Moving Average. If the ETF drops below the SMA then it will drop fast. Enter a new short position on a sell stop at $72.40.
iShares DJ US Industrials
ETF Symbol: IYJ
iShares DJ US Healthcare
ETF Symbol: IYH
DJ US Healthcare is approaching a support level. Stay on the sidelines this week.
iShares DJ US Financial
ETF Symbol: IYF
DJ US Financial ETF has conflicting signals. Stay on the sidelines this week.
iShares DJ US Energy
ETF Symbol: IYE
A short position in DJ US Energy was initiated last week on a sell stop. The price has dropped below the 200 day SMA, considered very bearish. Maintain the short position with a protective stop at $40.50.
iShares DJ US Consumer Services
ETF Symbol: IYC
Exit the short position in DJ US Consumer Services as the ETF will likely trade higher within the descending channel this week. Even if IYC breaches the lower trend line of the descending channel it won't likely drop too far.
iShares DJ US Utilities
ETF Symbol: IDU
All I can say is WOW! Lots has been made on this short trade on DJ US Utilities. It's time to exit the trade and take profits as the ETF is now at a major support level.
Sector Inspector's Sign Language
- Sell short,continue to hold a short position or close long position
- Do not initiate a new position
- Go long, continue to hold a long position
Technical Analysis Terminology
Disclosure: The author "Walks the walk" in addition to "Talking the Talk".