
Charts Show Consumer Staples, Energy, Utilities Sectors Vulnerable After 'Brexit'
In a shook-up stock market world after the British vote to leave the European Union, the S&P 500 I:GSPC as a whole has a negative weekly chart. So do seven sectors: materials, industrial, consumer discretionary, financial, health care, technology and transports.
Only three sectors are not negative. Consumer staples and energy have neutral weekly charts. The utilities sector is positive but overbought and its dividend yield is no longer compelling.
As the bear roams the market the entire S&P 500 is in "sell on strength" mode. This is a symptom that "sell in May and go away" was a prudent strategy, especially after a "Brexit"-enhanced June swoon.
Investors need to beware that that June could end with negative weekly charts across all five major averages and among all 10 S&P sector ETFs. This technical setup will be similar to that at the beginning of 2016. Remember the price gaps lower as 2016 began?
Here's this week's scorecard for the ten exchange-traded funds that represent each of the sectors of the S&P 500. The charts that follow are courtesy of MetaStock Xenith
The weekly chart for the Materials Select Sector SPDR Fund (XLB) - Get Report has been downgraded to negative from positive but overbought with the ETF below its key weekly moving average of $46.58 with the ETF above its 200-week simple moving average of $44.46. The weekly momentum reading ended last week at 76.08 down from 81.54 on June 17 falling below the overbought threshold of 80.00.
Investors looking to buy the materials ETF should do so on weakness to $45.60, which is a key level on technical charts until the end of June, but beware that the downside risk is to $35.37 by the end of 2016.
Investors looking to reduce holdings should consider selling strength to $49.14 and $50.40, which are key levels on technical charts until the end of June.
The weekly chart for the Industrial Select Sector SPDR Fund (XLI) - Get Report has been downgraded to negative from neutral with the ETF below its key weekly moving average of $55.40 and above its 200-week simple moving average of $49.96. The weekly momentum reading declined to 60.51 last week down from 69.17 on June 17.
Investors looking to buy the industrial ETF should do so on weakness to $43.64, which is a key level on technical charts until the end of 2016.
Investors looking to reduce holdings should do so on strength to $55.99, which is a key level on technical charts until the end of June.
The weekly chart for the Consumer Discretionary Select Sector SPDR Fund (XLY) - Get Report remains negative with the ETF below its key weekly moving average of $77.96 and above its 200-week simple moving average of $66.31. The weekly momentum reading declined to 51.13 last week down from 62.56 on June 17.
Investors looking to buy the consumer discretionary ETF should do so on weakness to $71.86, which is a key level on technical charts until the end of 2016.
Investors looking to reduce holdings should consider selling strength to $82.46 and $83.73, which are key levels on technical charts until the end of June.
The weekly chart for the Consumer Staples Select Sector SPDR Fund (XLP) - Get Report has been downgraded to neutral from positive with the ETF just below its key weekly moving average of $53.15 and above its 200-week simple moving average of $44.78. The weekly momentum reading rose to 74.85 up slightly from 74.47 on June 17.
Investors looking to buy the consumer staples ETF should do so on weakness to $46.64, which is a key level on technical charts until the end of 2016.
Investors looking to reduce holdings should consider selling strength to $54.35, $55.51 and $56.06, which are key levels on technical charts until the end of June.
The weekly chart for the Energy Select Sector SPDR Fund (XLE) - Get Report remains neutral with the ETF above its key weekly moving average of $66.13 and well below its 200-week simple moving average of $78.06. The weekly momentum reading fell to 73.54 last week down from 76.03 on June 17.
Investors looking to buy the energy ETF should do so on weakness to $59.37, which is a key level on technical charts until the end of June. The downside risk is to $54.40 by the end of 2016.
Investors looking to reduce holdings should consider selling strength to $69.55, which is a key level on technical charts until the end of this week.
The weekly chart for the Financial Select Sector SPDR Fund (XLF) - Get Report remains negative with the ETF below its key weekly moving average of $22.86 and above its 200-week simple moving average of $21.61. The weekly momentum reading ended last week at 61.99 down from 74.56 on June 17.
Investors looking to buy the finance ETF should do so on weakness to $20.43, which is a projected monthly value level for July.
Investors looking to reduce holdings should consider selling strength to $23.69 which is a key level on technical charts until the end of June.
The weekly chart for the Health Care Select Sector SPDR Fund (XLV) - Get Report remains negative with the ETF below its key weekly moving average of $70.19 and above its 200-week simple moving average of $60.00. The weekly momentum reading ended last week at 69.53 down from 77.99 on June 17.
Investors looking to buy the health care ETF should do so on weakness to $60.59, which is a key levels on technical charts until the end of 2016.
Investors looking to reduce holdings should consider selling strength to $73.20 and $77.92, which are key levels on technical charts until the end of June.
The weekly chart for the Utilities Select Sector SPDR Fund (XLU) - Get Report remains positive but overbought with the ETF above its key weekly moving average of $49.67 and well above its 200-week simple moving average of $41.81. The weekly momentum reading rose to 85.96 last week up from 82.92 on June 17 becoming more overbought above the 80.00 threshold.
Investors looking to buy the utilities ETF should do so on weakness to $48.60, which is a key level on technical charts until the end of June.
The $49.58 and $50.15 levels remain magnets until the end of June.
Investors looking to reduce holdings should consider selling strength to $51.65, which is a key level on technical charts until the end of this week.
The weekly chart for the Technology Select Sector SPDR Fund (XLK) - Get Report remains negative with the ETF below its key weekly moving average of $43.09 and above its 200-week simple moving average of $37.28. The weekly momentum reading declined to 58.97 last week down from 65.96 on June 17.
Investors looking to buy the technology ETF should do so on weakness to $35.69, which is a key level on technical charts until the end of 2016.
Investors looking to reduce holdings should consider selling strength to $45.18, which is a key level on technical charts until the end of June.
The weekly chart for the Shares Transportation Average ETF (IYT) - Get Report remains negative its the ETF below its key weekly moving average of $137/06 and just below its 200-week simple moving average of $132.46. The weekly momentum reading declined to 38.77 last week down from 46.16 on June 17.
Investors looking to buy the transportation ETF should do so on weakness to $123.82, which is a key level on technical charts until the end of 2016.
Investors looking to reduce holdings should consider selling strength to $136.24, which is a key level on technical charts until the end of 2016.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.




















