Sector Analysis 15Jan12

Added on by StockMarketStudent.

by Steve Auger

Sector Analysis Summary

Last week several sectors broke out of triangle formations including industrials and transportation given the green light in last weeks journal.  This week consumer goods and consumer services look good.  See below for detailed sector analysis.

Proceed with caution (yellow light)

iShares DJ US Telecom

ETF Symbol: IYZ

Stock chart of iShares DJ US Telecom showing technical analysis for January 15, 2012  DJ US Telecom chart previously broke out from a symmetrical triangle and now appears to be forming an ascending triangle.  IYZ is trading well below the 200 day simple moving average and is at one (of many near) resistance levels.  It is best to sit on the sidelines and wait to see how this ETF chart develops.

Proceed with caution (yellow light)iShares Dow Jones Transportation Average

ETF Symbol: IYT

iShares Dow Jones Transportation Average IYT stock chart showing technical analysis for January 15, 2012

 DJ Transportation Average previously broke out of an ascending triangle which is bullish chart pattern.  The ETF price is above the 200 day moving average and is at a resistance level with the most recent day being a doji candlestick, signaling a short term reversal.  Intermediate term the price will likely "hug" the upward trend line.  Since a position is already being held in this ETF a possible play would be to write (sell) April 99 Call Options.

Sell stock (Red light)iShares DJ US Basic Materials

ETF Symbol: IYM

iShares DJ US Basic Materials stock chart showing technical analysis for January 15, 2012

 DJ US Basic Materials previously broke out of a symmetrical triangle and the price chart was very bullish last week.  However the ETF is at a fairly significant resistance level and is still trading below the 200 day simple moving average.  My belief is that IYM is overbought and will likely drop from here.

Buy ETF (green light)iShares Dow Jones US Consumer Goods

ETF Symbol: IYK

iShares Dow Jones US Consumer Goods stock chart showing technical analysis for January 15, 2012

 DJ US Consumer Goods previously broke out of an ascending triangle and is now following a bullish trendline.  The price is trading above the 200 day simple moving average and appears to be preparing for take-off.



Sell stock (Red light)iShares DJ US Industrial

ETF Symbol: IYJ

iShares DJ US Industrial stock chart showing technical analysis for January 15, 2012

 DJ US Industrial has previously broken out of an ascending triangle and has been very bullish the last week.  The price is now sitting at a long term resistance level.  This ETF appears to be overbought presently and should retreat back to the (bullish) trendline.  This presents a very short term sell opportunity.  Since there are no IJT options I will be selling my IYJ holdings.  Otherwise I would have considered writing Call Options against my long position in IYJ.

 

Proceed with caution (yellow light)iShares DJ US Healthcare

ETF Symbol: IYH

iShares DJ US Healthcare stock chart showing technical analysis for January 15, 2012

 DJ US Healthcare has an interesting stock chart. The ETF price is currently near long term resistance but continues to hug the bullish trendline.  Sit on the sidelines for now.  However, the 5 year price chart (not provided) shows that IYH is partially into the third leg of an upward swing that could take the price up to $85.  If the price penetrates $76 then enter a long position without hesitation.

 

Proceed with caution (yellow light)iShares DJ US Financial

ETF Symbol: IYF

iShares DJ US Financial Sector stock chart showing technical analysis for January 15, 2012

 DJ US Financial has formed a symmetrical triangle.  The price is at the 200 day simple moving average and a long term resistance level. IYF could break either way.  Stay on the sidelines.

 

Sell stock (Red light)iShares DJ Energy

ETF Symbol: IYE

iShares DJ Energy stock chart showing technical analysis for January 15, 2012

 DJ US Energy has broken out of an ascending triangle but it has subsequently dropped below the triangle support level.  I should also mention that this ETF is just below the 200 day simple moving average.  IYE has reached the 200 day simple moving average three times previously without breaking through.  IYE appears to be breaking down.

 

 

Buy ETF (green light)iShares DJ US Consumer Services

ETF Symbol: IYC

iShares DJ US Consumer Services stock chart showing technical analysis for January 15, 2012

   DJ US Consumer Services has broken out of an ascending triangle.  The price is above the 200 day simple moving averageand appears to be following the bullish trendline upwards.  The last trading days  I like the looks of this stock chart - IYC is a good candidate for going long. However a tight protective stop should be placed below the local support level.

Proceed with caution (yellow light)iShares DJ US Utilities

ETF Symbol: IDU

iShares DJ US Utilities stock chart showing technical analysis for January 15, 2012

DJ US Utilities fell as predicted last week.  The shadow of the long tail candlestick for the most recent trading day reaches down to the lower bullish trendline, marking the support level.  Although the price will probably bounce from here, I don't like the erratic nature of this chart and suggest staying on the sidelines.


Disclosure:  The author currently holds positions in iShares IYT Dow Jones Transportation Average and IYJ Dow Jones Industrials.