Leading and lagging sector ETFs (discusses XLE, OIH, IGE)

|
Includes: IGE, OIH, XLE
by: Nick Perry

Here you can see the top- and bottom-performing groups from last Friday's close through this morning, writes Nick Perry, who covers ETFs for Schaeffer's Investment Research.

Etf061705etfw

Last week we saw that oil, energy and real estate were the top performers with oil services taking the lead. This week we see that oil and energy related groups remain strong with natural resources taking the top spot.

Of course a scan of the list shows that most groups had a positive week, as some of the bottom-performing groups still showed gains. Bonds were the worst performing group but even those losses were minor.

In recent weeks I have focused on the Energy Sector SPDR (ticker: XLE) and the Oil Service HOLDRS (ticker: OIH) so I want to turn your attention to the iShares Natural Resources Fund  (ticker: IGE). The table below shows the weightings of various sectors in the IGE.

    •      65 percent - Oil
    •      15 percent - Oil Services
    •      10 percent - Metals & Mining
    •      5 percent - Paper & Forest
    •      4 percent - Gas
    •      Less than one percent - Other Energy
    •      Less than one percent - Other Basic Materials

As you can see, oil makes up a large portion of the weighting, but this ETF does offer some exposure to the metal and mining group, which has been showing some signs of life recently. And as you might expect given this exposure, the chart of the IGE shows some similar traits to what we saw when we looked at the XLE and OIH.

Etf061705ige

This weekly graph illustrates the solid long-term uptrend in place. The IGE recently pulled back to test congestion near 65 and has now rallied back to test its former high. While this might prove to be short-term resistance, the uptrend would be considered in place unless the group violated that support zone.

Looking to my graph of the major indices shows us how some of the key barometers are moving relative to each other.

Etf061705indexw

Overall, we see a strong week as most of the major indices traded higher. Of particular interest is the strength of the RUT, as it continues to bounce back from its recent downdraft and now sits within a chip shot of its all-time high.

Nick Perry (regressionchannels@sir-inc.com)

Not subscribed to ETF Investor? You can get updated headlines for free by adding ETF Investor to your My Yahoo page. Just log into your My Yahoo page, then go to The China Stock Blog and click on the "+ My Yahoo" button on the top right of your screen. You can do the same for other sites, such as The Internet Stock Blog, The China Stock Blog, Radical Guides and Sound Money Tips.