A sector with clear blue skies?

Here is an update to the Sector analysis we have been blogging about. Numerous sector retested the support levels that were highlighted in a very volatile past two weeks. The table below shows the updated levels along with our top bullish and bearish sectors. Consumer Discretionary and Healthcare remain leaders whereas the Industrials sector broke the key support we had highlighted and took a further leg down. All charts are from TD Thinkorswim in the format of Monthly, Weekly and Daily.

Sector table oct 4

 

Consumer Discretionary:

XLY continues to hold the key multiple time frame support of 73.29. Despite going below the level during the week, price was able to close above this level for the month as well indicating its bullish potential.

XLY monthly oct 4XLY weekly oct 4 XLY daily oct 4

Healthcare:

XLV continues to remain bullish on the higher timeframes. The daily retested the support of 64.47 on an intra week basis. Price needs to break the 68.51 resistance to begin to show bullish signs on the daily. As long as the weekly support highlighted holds, XLV remains biased to the bullish side.

XLV monthly oct 4 XLV weekly oct 4 XLV daily oct 4Technology:

XLK continues to remain neutral on the weekly timeframe as price has yet to break above or below the cloud. The key level to watch remains at 37.57 as the boundary condition. The technology sector rounds out the list of the top 3 bullish sectors in the SP500 index. XLK monthly oct 4 XLK weekly oct 4 Financials:

XLF retested the multiple time frame support of 22.07 and held that on all 3 timeframes on their respective closes. Despite holding the support price needs to break the 23.11 on the daily timeframe to begin any bullish move. Should any of the timeframes close below the 22.07 level, that would be the first sign of weakness in the Financials.  XLF monthly oct 4 XLF weekly oct 4 XLF daily oct 4

Consumer Staples:

XLP was able to close above the key level of 47.33 for the 2nd week in a row despite retesting the support of 46.53 on an intra-week basis however the monthly was unable to close above it. Probabilities continue to remain on the bullish side until price closes below the 46.53 levelXLP monthly oct 4 XLP weekly oct 4 XLP daily oct 4

Industrials:

XLI continues to show its bearish strength with a retest of the 48.85 level last week. A break below, can begin to put the 45.96 support in sights.

XLI monthly oct 4 XLI weekly oct 4 XLI daily oct 4

Utilities

XLU remains in its messy consolidation with the 43.48 level being the key should it attempt to retest the 44.9 resistance.

XLU monthly oct 4 XLU weekly oct 4 XLU daily oct 4

Materials:

XLB remains bearish by retesting the 39.40 support we had highlighted a few weeks ago. The materials sector has not shown any signs of this bearish trend bottoming just yet.XLB monthly oct 4 XLB weekly oct 4 XLB daily oct 4

 

Energy:

The key notable on the XLE is the long term monthly sentiment change of the Energy sector to be bearish given price closed below the Ichimoku cloud. As predicted, price retested the support of 59.19 on an intra week basis. It will be interesting to watch if this sector breaks that 59.19 level which will spell further downward pressure in the sector.XLE monthly oct 4 XLE weekly oct 4 XLE daily oct 4Telecom:

Below are the weekly and daily charts for the Telecom (XTL) sector. Price held the resistance we had outlined in the earlier weeks and retested the 53.00 support level and closed below it. This sector continues to show its bias towards the bearish side. A close below the 51.92 support may start a trend on the weekly timeframe.XTL weekly oct 4 XTL daily oct 4

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About the Author Maneshkumar Patel