Best Sectors to Trade for July $XLK. Let’s look at seasonal patterns for the month of July and then see if the charts support the patterns.
Below is the top sectors provided by www.alerttrades.com (no charge for the data).
The $XLK Technology ETF is the top seasonal sector. Here is the individual data for the $XLK.
It has 89% probability of being Bullish for the month of July but the reward/risk is not good. The average reward is 3.3% and the draw down is 2.4%. This gives a little over 1:1 reward/risk.
First, we have to verify the sentiment is bullish on the charts. Just because the seasonal data says it has a high probability of being bullish doesn’t mean we will go bullish.
Below is the weekly chart provided by eSignal. The instrument is going through a bullish consolidation pattern. The support at 41.32 is holding the instrument in a bullish mode.
Now that we know the long term view is bullish, we need to find the iMTF™ support. We need to look at pull back entry for a possible trade due to the bad reward/risk presented by the seasonal data.
Below is the daily chart. The sentiment is bullish with a major support at 42.63 and 42.81.
Below is the 240m chart. It has a major support at 42.63 and 42.43.
Below is the 60m chart. It has a major support of 42.72 and 42.63.
Analyzing all the charts, it clearly can be seen that the iMTF™ is at 42.63. On the 60m it is the “boundary” condition support on it being bullish sentiment or consolidation. Therefore, an entry can be placed at iMTF™ on a 60m time frame.
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