by Steve Auger

Sector Analysis Summary

Last week started out bullish as I expected but stalled mid-week.  Many of the sectors still appear to be in breakout mode but not quite as appetizing as they appeared last week.  I'm anticipating a short term pullback in the general markets but after that the stock markets should start to move up again.

ETF Trading System

Proceed with caution (yellow light)

iShares DJ US Telecom

ETF Symbol: IYZ

Stock chart of iShares DJ US Telecom showing technicalanalysis for January 29, 2012 DJ US Telecom chart has a tug of war going on.  On the bullish side,   there is an ascending triangle forming with the most recent day's action seeing the candlestick shadow touching the bullish trendline.  Since the price bounced off the trendline, continued bullishness is expected.  On the other hand, the Williams%R indicates short term bearishness and the On-Balance Volume indicator may be starting to show bearish divergence with the price chart.  IYZ should be watched closely.  A break above the ascending triangle resistance will be very bullish.  A break below the (bullish) trend line will be very bearish.  Entry on long or short position should be done with a stop order.  

Sell stock (Red light)

iShares DJ US Technology

ETF Symbol: IYW

 

Stock chart of iShares DJ US Technology showing technicalanalysis for January 29, 2012 DJ US Technology has had a good bullish run for the last two weeks.  This ETF appears to be overbought and is due for a short term pullback to either of the support levels shown. 

 

Buy ETF (green light)

iShares DJ Transportation Average

ETF Symbol: IYT

iShares Dow Jones Transportation Average IYT stock chartshowing technical analysis for January 29, 2012

DJ Transportation Average previously broke out of an ascending triangle and continues to trend upward while staying above the trend line. All indicators are bullish and I expect that the price will continue to "hug" the bullish trendline.  If a position is established then a protective stop should be placed below the trendline.

Buy ETF (green light)

iShares DJ US Basic Materials

ETF Symbol: IYM

iShares DJ US Basic Materials stock chart showing technical analysis for January 29, 2012

DJ US Basic Materials has broken out of an ascending triangle and also the 200 day simple moving average.  When both occur simultaneously, it usually results in a significant move upward. This ETF **may** retrace back to the support level shown on the chart but this will likely depend on the overall stock market action.  If the stock exchange starts out down on Monday then it would be prudent to place a limit order near the support level.  Otherwise just buy at market.

Buy ETF (green light)iShares DJ US Consumer Goods

ETF Symbol: IYK

iShares Dow Jones US Consumer Goods stock chart showingtechnical analysis for January 29, 2012

DJ US Consumer Goods advanced mid-week to the next resistance level then retreated as expected.  There may be a minor retreat back to the trendline for early this coming week.  This is supported by the Williams%R indicator.  If the position was sold last week then it should be re-established using a limit order near the trendline.  If still holding this ETF then continue to do so.

 

Proceed with caution (yellow light)

iShares DJ US Industrial

ETF Symbol: IYJ

iShares DJ US Industrial stock chart showing technicalanalysis for January 29, 2012

DJ US Industrial is still going strong.  This ETF appears to be overbought presently and should retreat back to the (bullish) trendline.  When it does it will be a great buying opportunity. (Patience is a virtue).

 Proceed with caution (yellow light)iShares DJ US Healthcare

ETF Symbol: IYH

iShares DJ US Healthcare stock chart showing technical analysis for January 29, 2012

DJ US Healthcare has an interesting stock chart. The ETF price continues to float upward but I expect it will eventually stall.  It will likely fall to the red line shown on the chart.

 

Buy ETF (green light)

iShares DJ US Financial

ETF Symbol: IYF

iShares DJ US Financial Sector stock chart showing technical analysis for January 29, 2012

DJ US Financial has broken out of a symmetrical triangle and has moved above the 200 day simple moving average and a local resistance level. IYF continues to be bullish so long as it stays above the support level.

Buy ETF (green light)

iShares DJ US Energy

ETF Symbol: IYE

iShares DJ Energy stock chart showing technical analysisfor January 29, 2012

DJ US Energy broke out of the ascending triangle then immediately retraced but has so far held up above the triangle top.  The price chart still appears bullish but the Williams%R indicates the pullback may not be complete.   The long position should be held but with a tight stop.  If the price drops below the trend line(s) then consider reversing the position and going short.

Proceed with caution (yellow light)

iShares DJ US Consumer Services

ETF Symbol: IYC

iShares DJ US Consumer Services stock chart showing technical analysis for January 29, 2012

DJ US Consumer Services has continued its bullish trend but I'm not sure how much longer it will defy gravity.  Stay on the sidelines until the price comes down to the trendline.

Proceed with caution (yellow light)

iShares DJ US Utilities

ETF Symbol: IDU

iShares DJ US Utilities stock chart showing technical analysis for January 29, 2012

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. 


Disclosure:  The author currently holds positions in iShares IYE DJ US Energy, IYF DJ US Financial and IYK DJ US Consumer Goods.

Posted
AuthorStockMarketStudent