Sector Analysis 20 May 2012
/by Steve Auger
The charts are looking fairly bleak **again** this week. Most of the sectors are either bearish or neutral. It may be a good time to take profits, wait for a bounce and then re-enter new short positions.
iShares DJ US Telecom
ETF Symbol: IYZ
DJ US Telecom fell last week, ending at a support level. It is time to take some money off the table as this ETF could bounce in the coming week. I am looking at re-establishing a short position when the price approaches the 200-day moving average.
iShares DJ US Technology
ETF Symbol: IYW
DJ US Technology blew through the support level of $69.60. There may be a bounce to the $69.60 before resuming the downward movement. The next stop on the down-elevator will likely be $66.
iShares DJ Transportation Average
ETF Symbol: IYT
The price held up for the first three days last week for the DJ Transportation Average. Then the price crashed through the trend line, falling from $91 down to $87.27. IYT breached the 200-day moving average and I see no reason to be anything but bearish here. Next stop is $85.80 then all the way down to $74.50.
iShares DJ US Basic Materials
ETF Symbol: IYM
DJ US Basic Materials broke down through the lower trend line of the descending channel. The move downward was a strong trend. Obviously, no one told IYM about the cyclical low on Monday as the ETF price kept going down. It is now at a support level. This ETF will likely bounce here but how far and how long remains to be seen.
iShares DJ US Consumer Goods
ETF Symbol: IYK
DJ US Consumer Goods continued to break down last week but ended at a support level. There will likely be a bounce early this coming week but use this to establish short positions.
iShares DJ US Industrial
ETF Symbol: IYJ
DJ US Industrial broke through its support level last week and proceeded to move down close to the next support level of $64.30. This ETF could bounce back up to the $68 level from here.
iShares DJ US Healthcare
ETF Symbol: IYH
DJ US Healthcare doesn't appear to be going anywhere. Stay on the sidelines.
iShares DJ US Financial
ETF Symbol: IYF
DJ US Financial crashed the support level of $54 and settled at ~$52 on Friday, a support level. There may be a bounce back to $54 before resuming the downward trend.
iShares DJ US Energy
ETF Symbol: IYE
DJ US Energy is in a long-term bear market. I have drawn an Andrews Pitchfork on the chart - 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.
iShares DJ US Consumer Services
ETF Symbol: IYC
DJ US Consumer Services breached the support level last week. This ETF will likely bounce before resuming a downward trend.
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iShares DJ US Utilities
ETF Symbol: IDU
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".
