Sector Analysis 28 May 2012

by Steve Auger

The sector ETFs bounced last week and the longer term picture for some is unclear.  However, in some cases, bearish positions should be re-established.

iShares DJ US Telecom

ETF Symbol: IYZ

Remain cautious with DJ US Telecom this week.  IYZ is still trading below the 200-day Simple Moving Average and there may be more upside movement in the coming days.  Longer term this ETF is bearish.

iShares DJ US Technology

ETF Symbol: IYW

DJ US Technology remains bearish this week.  WilliamsR is signalling a bearish trend.  The price should fall to the 200-day Simple Moving Average in the coming week(s) and eventually down to the support level of $66.

iShares DJ Transportation Average

ETF Symbol: IYT

DJ Transportation Average had a fairly significant bounce upward last week.  I still see the trend being downward but IYT will likely follow the general market in the short term.

iShares DJ US Basic Materials

ETF Symbol: IYM

DJ US Basic Materials had a strong bounce last week but the chart remains bearish.  WilliamsR is signalling a bearish trend.  The ETF should eventually retest the support level at $61.

iShares DJ US Consumer Goods

ETF Symbol: IYK

DJ US Consumer Goods recovered to end the week at a support level and this is a good opportunity to short this ETF.

iShares DJ US Industrial

ETF Symbol: IYJ

Remain caution on DJ US Industrial this week as there are mixed signals and the price is somewhere between support and resistance levels. 

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 bounced last week.  IYF is approaching a significant resistance level and should continue its downward trend in the near future.

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 is giving mixed signals.  Stay on the sidelines until a clearer picture arises.

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".