Chart Analysis: Which of the major sectors have done best in the past week and are the stocks in your portfolio part of these sectors? These are all good questions for both investors and traders. One way I analyze the market sectors, in addition to my regular performance or RS analysis, is to monitor the Spyder Sector ETF performance from the Friday close through the following Thursday’s close.
The table at the bottom left has results for the past week (remember you can enlarge it)
> Energy Select Spyder (NYSEARCA:XLE) had the best week up 2.36 vs. 0.96% for the S&P
>XLE chart is positive, approaching next target at $71
> 2008 resistance for XLE at $78
> Wide gap between XLE and its moving averages (MAs)
> XLE support at $67.50
> Industrial Select Spyder (NYSEARCA:XLI) up 2.08%
> Chart of XLI shows strong uptrend ,resistance from 2008 at $36-38
> XLI has 1st support at $34.60-35 and then at $33.50
> Volume declining on both ETFs
What it Means: If you are bullish on the stock market then you will be better off concentrating on stocks or options that are in those sectors that are performing stronger than the overall market like the S&P 500. Both energy and industrials have been leading the market for some time and there are no signs of a change. Volume patterns are not great.
How to Profit:
> Previously recommended long positions in XLE at $65.80 and later raised the stop to $66.77 and advised taking profits on half the position at $69.76. This level was hit on 1/12/11. Hold the remaining 50% position, stop $66.77
> No position or new recommendation for XLI