by Steve Auger

The stock market was strong last week in spite of the ongoing concerns in Europe.  It is likely that this issue (Europe/Greece/Spain) is suffering from investor fatigue and in that case the markets should continue to be strong.  The best part of a bull market is the initial stages, while the average investor is sleeping.  This being said, the recent strength could be one big head-fake with the bear returning with full fury.  In any case, the good sectors are starting to separate from the bad.  So don't just jump on the bandwagon but be very selective.

ETF Trading System

Buy ETF (green light)

iShares DJ US Telecom

ETF Symbol: IYZ

Stock chart of iShares DJ US Telecom showing technical analysis for June 17, 2012 DJ US Telecom broke out of a descending channel last week.  This is a bullish sign supported by both the Williams%R (trending) and the On Balance Volume (bullish divergence).  Given the strength of the move over the last two weeks, I won't be surprised to see a pullback here, but it will be short-lived.  It is a good idea to buy 50% of your stock position early this coming week and wait for a pullback to the $21.80 level to buy the remaining 50%.

 

 

Caution (yellow light)

iShares DJ US Technology

ETF Symbol: IYW

Stock chart of iShares DJ US Technology showing technical analysis for June 17, 2012 DJ US Technology is loosely fitting within a descending channel, on the verge of breaking out.  If the general stock market is strong the coming week then IYW will follow with strength and we will see a fairly strong breakout.  Aggressive traders should buy on a stop at $71.50.

 

 

Caution (yellow light)

iShares DJ Transportation Average

ETF Symbol: IYT

iShares Dow Jones Transportation Average IYT stock chart showing technical analysis for June 17, 2012 DJ Transportation Average is behaving similar to US Techology (Symbol: IYW).  The ETF is at the top end of a descending channel, on the verge of a breakout.  I'm not particularly confident with this ETF as last week's performance was lack-luster.  Aggressive traders should sell short on a price down movement.

 

 

Caution (yellow light)

iShares DJ US Basic Materials

ETF Symbol: IYM

iShares DJ US Basic Materials stock chart showing technical analysis for June 17, 2012

DJ US Basic Materials is approaching a resistance level.  It is best to stay on the sidelines until a good buy signal appears.  Aggressive traders could play the short side, selling short on a price downward movement.

 

 

Sell ETF (red light)

iShares DJ US Consumer Goods

ETF Symbol: IYK

iShares Dow Jones US Consumer Goods stock chart showing technical analysis for June 17, 2012

DJ US Consumer Goods has broken out of a descending channel but is approaching resistance.  I can't see this ETF going much higher - I am expecting a downturn when the general market turns, as it eventually will.  Look for the price to "hug" the descending trend line showing in the chart.

 

Caution (yellow light)

iShares DJ US Industrial

ETF Symbol: IYJ

iShares DJ US Industrial stock chart showing technical analysis for June 17, 2012Look for DJ US Industrial to rise to the resistance level then stall.   The long term direction is hard to predict as there are no obviously tradeable patterns;  so I recommend staying on the sidelines.

 

 

Caution (yellow light)

iShares DJ US Healthcare

ETF Symbol: IYH

iShares DJ US Healthcare stock chart showing technical analysis for June 17, 2012

DJ US Healthcare is been quite strong for the past two weeks.  Continue to stay on sidelines until a tradeable pattern emerges.

 

 

Buy ETF (green light)

iShares DJ US Financial

ETF Symbol: IYF

iShares DJ US Financial Sector stock chart showing technical analysis for June 17, 2012

DJ US Financial gets the green light this week as the price has penetrated the long term resistance level.  A tight stop should be placed however in the event of further turmoil in Europe in the coming week.

 

 

Sell ETF (red light)

iShares DJ US Energy

ETF Symbol: IYE

iShares DJ Energy stock chart showing technical analysis for June 17, 2012

DJ US Energy "should" continue its long-term bear market if my interpretation of  Andrews Pitchfork is correct.- not one of my favorite indicators, but let's see if the price stays within the pitchfork boundaries.  I expect this ETF to continue down.

 

Buy ETF (green light)

 iShares DJ US Consumer Services

ETF Symbol: IYC

iShares DJ US Consumer Services stock chart showing technical analysis for June 17, 2012

DJ US Consumer Services is at a resistance level but given the recent price action I am predicting that this ETF will rise from here.  From the price chart it can be seen that there was a double bottom followed by an up surge/pullback with a higher low.  Look for the resistance level to be penetrated this week.

 

 

Caution (yellow light)

iShares DJ US Utilities

ETF Symbol: IDU

iShares DJ US Utilities stock chart showing technical analysis for June 17, 2012

DJ US Utilities price is bouncing between support and resistance.  Stay on the sidelines.

 

 

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

Posted
AuthorStockMarketStudent