2 new market-leading sectors
Latest sector analysis shows consumer staples and health care could be the new star performers. Also keep an eye on energy and technology, and avoid lagging financials.
- The daily chart shows more important support now in the $32.30-$32.70 area with major support at $31.50
- The relative performance, or RS chart, measures how a stock or ETF is performing relative to the S&P 500. For XLV, we can see that it turned up in February and completed a bottom formation on Monday (point 1) as it broke through resistance at line b
- The daily on-balance volume (OBV) has turned up from support at line d, but has not yet moved to new highs
- The 2008 highs in XLV are at $33.70, and above that, I have further targets in the $36.50-$38 area
- The long-term upper trend line resistance, line e, is currently at $31.20, and the 2008 highs at $29.29 have been exceeded
- The RS analysis for XLP shows a similar formation having just moved above the key resistance at line f, which confirmed that XLP was outperforming the S&P 500 (point 2)
- The daily OBV has moved through resistance (line g) after holding long-term support in March, line f
- XLP is overextended in the short term with first good support at $30-$30.20 and much stronger support at $29.50
- The daily chart shows that the 38.2% support level has been reached with the 50% support at $25.40. A break below the $25-$25.11 level would suggest a test of the March lows
- The RS analysis shows well-defined resistance (line b), which, if overcome, would be a positive for the sector
- The daily OBV is still negative but has not shown any heavy selling pressure so far. The weekly OBV did confirm the February highs, which is a positive for the intermediate term
- There is short-term resistance now at $26 (line a) and a close above this level would stabilize the short-term outlook. More important resistance is at $26.66
- XLF closed at next support in the $16-16.10 area. A decisive break of this level would project a decline to the $15.40 area. This would equal the prior decline (100%)
- The RS analysis formed lower highs in February which identified this sector as an underperformer. It has been weaker than the S&P 500 for the past few months as the RS has formed lower lows, line h
- It would take a move in the RS above its downtrend, line g, to turn it around
- XLF has first resistance now at $16.50-60 and a close above $16.75 is needed to suggest that this sector has stabilized
- The daily OBV (not shown) continues to be weak and show no signs yet of bottoming
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
An interest rate tease in The Wall Street Journal sends the market into an optimistic tizzy -- but one that doesn't end quite at the top.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.