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How to Trade the Select Sector SPDR Funds

The computer and technology sector was 3.1% undervalued at the end of July and is 12.4% overvalued today. My benchmark for this sector is the Technology Select Sector SPDR Fund (XLK), and its daily chart profile shows overbought momentum.

With XLK we show that Tuesday was "key reversal" day where the day's close was below Monday's low after setting a new multiyear high. On Aug. 9 I provided "Buy and Trade" guidelines for "Trading Technology and Telecom Stocks." XLK ($30.58) is trading between my annual value level at $25.48 and my monthly and quarterly risky levels at $31.40 and $32.18, respectively. My annual pivot is at $29.93.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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SYM TRADE IT LAST %CHG
XLP $50.31 0.20%
XLF $25.21 -0.32%
XLI $54.22 -0.09%
XLB $45.95 -0.26%
XLY $80.22 0.31%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

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