While I usually focus on the short-term action of the last week, I wanted to switch to a longer-term timeframe and look at the leading and lagging groups over the last year, writes Nick Perry, who covers ETFs for Schaeffer's Investment Research.
Here you can see the top and bottom performing groups from last June through Monday morning.
In recent weeks I have focused on the Energy Sector SPDR (NYSEARCA:XLE), the Oil Service HOLDRS (NYSEARCA:OIH), and the iShares Natural Resource (NYSEARCA:IGE) as they have shown strong short-term gains. And as you can see in the chart above, this is part of a longer-trend as these are some of the strongest groups over the last year. Outside the oil and energy groups, we see that utilities and real estate have been strong. In particular the chart of the Utilities HOLDRS (NYSEARCA:UTH) caught my eye.
It is not often you see such a steady long-term trend. Major support sits near 100 while short-term support lies just above 105. The all-time high on the UTH is near 120 so the group is close to breaking out.
Turning to the groups that have lagged over the last year, we see that along with pharmaceuticals and biotech, there are a number of technology related groups. At the bottom of the list is Internet HOLDRS (NYSE:HHH), which is a group I have been tracking in our trading floor blog. Earlier today I featured this chart.
I have been tracking this chart for some time as the HHH has been struggling since breaking that two and a half year uptrend highlighted by the red channel. The green line is the 10-month moving average which has capped the shares this month. Major support sits near 50, which was the low for this year and was the closing low for 2004.
This is worth noting because there has been a good deal of buzz around internet stocks. With more than 70 percent of the analysts tracked by Zacks rating Yahoo (YHOO) as a "buy" and eBay (NASDAQ:EBAY) gracing a couple of magazine covers recently, it appears that expectations are fairly high. While that doesn't dictate that a fall has to happen, it does raise the odds that a disappointment may be lurking...
Keep this longer-term performance in mind as later on this week, I will return to note what groups led and lagged in the first six months of this year.
Nick Perry (email@example.com)
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