Domestic Week-in-Review By Sector: Oil & Energy Take A Hit (ETFs: OIH, XLE)

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Includes: OIH, XLE
by: Nick Perry


Nick Perry (Schaeffer's Investment Research) submits: Last week we saw mostly mild losses with gains in "clean energy" (NYSEARCA:PBW), Gold, biotech, and pharmaceuticals. This week we see that losses continued to dominate:

The largest losses were concentrated in oil-services and energy-related funds. Gold, natural resources, biotech, and construction-related funds were also weak. Semis and aerospace/defense were the strongest groups, but with gains that barely held above breakeven.

For a longer-term perspective, the bullets below show how the ETFs listed above have fared over the last six months, prior to this week. In other words, it shows how they had been performing before this week's move.

Prior Six-Month Returns for This Week's Top Performing Sector Exchange Traded Funds:

* Semiconductor HOLDRS (NYSEARCA:SMH) +0.2%
* PS Aerospace & Defense (NYSEARCA:PPA) n/a
* Telecom HOLDRS (NYSEARCA:TTH) -0.1%
* iShares DJ U.S. Telecomm (BATS:IYZ) -1.2%
* iShares GS Semiconductor (IGW) +11.4%
* SPDR-Industrial (NYSEARCA:XLI) +4.2%
* PS Telecom & Wireless (PTE) n/a
* AMEX Diamonds (NYSEARCA:DIA) +1.4%
* SPDR-Technology (NYSEARCA:XLK) +0.6%
* Regional Bank HOLDRS (RXH) +2.9%
* Wireless HOLDRS (WMH -0.7%
* iShares DJ U.S. Industrial (BATS:IYJ) +6.2%

Prior Six-Month Returns for This Week's Bottom Performing Sector Exchange Traded Funds:

* iShares DJ U.S. Basic Materials (NYSEARCA:IYM) +8.5%
* PS WilderHill Clean Energy (PBW) +27.0%
* streetTRACKS Gold (NYSEARCA:GLD) +30.4%
* PS Building & Construction (NYSEARCA:PKB) n/a
* PS Lux Nanotech (NYSEARCA:PXN) n/a
* Biotech HOLDRS (NYSEARCA:BBH) +4.1%
* iShares DJ U.S. Energy (NYSEARCA:IYE) +11.2%
* SPDR-Energy (NYSEARCA:XLE) +12.7%
* iShares GS Natural Resources (BATS:IGE) +16.1%
* Oil Service HOLDRS (NYSEARCA:OIH) +29.0%
* PS Oil Services (NYSEARCA:PXJ) n/a
* PS Energy Exploration & Production (NYSEARCA:PXE) n/a

Comparing the two lists suggests that selling pressure was heavier in the better-performing groups. In other words, we are seeing pullbacks amid momentum.

Last week I noted that the PowerShares WilderHill Clean Energy (PBW) had rallied into the President's State of the Union Address but drifted lower afterward and said I was curious to see if the group could hold its recent gains. The group struggled this week, but is still showing positive momentum over the last six months. As I noted in today's blog, ethanol has been a hot topic this week with a number of stories discussing it. While this ETF doesn't focus specifically on ethanol, the overall chatter on ethanol might lead some to the PBW given its "alternative energy" exposure. It might be one to keep watching.