Sector Analysis 12Feb12
/by Steve Auger
Sector Analysis Summary
With the price action from last week, some of the sectors such as technology and industrials remain very bullish, while others such as transportation and basic materials are dropping by the wayside. We should be in for another exciting week!
iShares DJ US Telecom
ETF Symbol: IYZ
DJ US Telecom is straddling the 200 day simple moving average. Cycles analysis predicts that the price will drop back to the support level at $21.70 Thursday or Friday next week. Longer term IYZ will remain bullish, following the bullish trendline upward. If there is significant penetration of the 200-day SMA with strong volume then it would be a good time to jump on board in spite of the cycles analysis.
iShares DJ US Technology
ETF Symbol: IYW
DJ US Technology is still going strong. If already holding a long position then hold on with a stop below the channel lower trend line. Otherwise wait for a pullback to near the lower channel trendline before entering long.
iShares DJ Transportation Average
ETF Symbol: IYT
DJ Transportation Average broke below the lower channel trend line. The price will likely drop to the support level. Traders should wait for a new pattern to develop before initiating a trade.
iShares DJ US Basic Materials
ETF Symbol: IYM
DJ US Basic Materials broke below the bullish trend line. The price will likely drop to the support level. Traders should wait for a new pattern to develop before initiating a trade.
iShares DJ US Consumer Goods
ETF Symbol: IYK
DJ US Consumer Goods is trading within a bullish wedge and currently at a support level. This ETF should be approached with caution as the On-Balance Volume appears to be forming bearish divergence.
iShares DJ US Industrial
ETF Symbol: IYJ
DJ US Industrial is at the middle channel trend line and also a support level. For this reason this ETF still has a green light. Note that bearish divergence with the On-Balance Volume indicator suggests that the bull run may be over soon. Use a very tight protective stop below the current support level.
iShares DJ US Healthcare
ETF Symbol: IYH
DJ US Healthcare is still in no man's land. The ETF price will likely fall to the red line shown on the chart. Wait for a new pattern to form before entering a position.
iShares DJ US Financial
ETF Symbol: IYF
DJ US Financial dropped on Friday as the cycle analysis predicted. The ETF is still trading above the channel center line. I would wait another day before getting back into this ETF as cycles are often off by a day. The price may get closer to the channel center line.
iShares DJ US Energy
ETF Symbol: IYE
DJ US Energy retraced but is still above the trend line and support level. So long as the ETF stays within the ascending wedge it should be held long.
iShares DJ US Consumer Services
ETF Symbol: IYC
DJ US Consumer Services is traveling a tight channel upward. It is time to go long with a protective stop below the support level. Keep an eye on the OBV as it may be starting tosignal a bearish divergence. This is longer term however.
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iShares DJ US Utilities
ETF Symbol: IDU
DJ US Utilities appears to be preparing to start moving upward if the OBV bullish divergence signal is correct. I'd stay on the sidelines until seeing the start of a bullish move however. The ETF is trading in a bearish channel and the price may drop to the $84 support level.
Disclosure: The author "Walks the walk" in addition to "Talking the Talk".
