Post Rate Hike, Here's How to Trade the 11 S&P Sector ETFs

Consumer discretionary, health care and technology sector ETFs have set new highs post the Federal Reserve's latest rate hike

The REIT and energy sector ETFs remain the year-to-date losers, but only technology has a year-to-date gain above 10%. Here's how to trade all 11 S&P sector exchange-traded funds.

The S&P 500 is divided into 11 sectors, and each is traded using its own exchange-traded fund. Consumer discretionary, health care and technology set new 52-week intraday highs last week, following a positive reaction to the Fed's rate hike. REITs and energy remain in correction territory versus highs set in July and December, respectively.

Seven sectors have positive but overbought weekly charts. REITs, energy and transportation have negative weekly charts. The materials sector has a neutral weekly chart.

Despite continued stock market strength, weekly momentum is declining above the overbought threshold of 80. This is a negative divergence as weekly closes are further below the weekly highs. This observation supports the investment strategy to reduce holdings on strength.

Scorecard For 11 Exchange-Traded Funds
Scorecard For 11 Exchange-Traded Funds

Global Market Consultants, Ltd

The 11 Sector ETFs are: SPDR Dow Jones REIT ETF (RWR) , Materials Sector SPDR Fund (XLB) , Industrial Sector SPDR Fund (XLI) , Consumer Discretionary Sector SPDR Fund (XLY) , Consumer Staples Sector SPDR Fund (XLP) , Energy Sector SPDR Fund (XLE) , Financial Sector SPDR Fund (XLF) , Health Care Sector SPDR Fund (XLV) , Utilities Sector SPDR Fund (XLU) , Technology Sector SPDR Fund (XLK)   and iShares Transportation Average ETF (IYT)

SPDR Dow Jones REIT ETF (RWR)
SPDR Dow Jones REIT ETF (RWR)

Courtesy of MetaStock Xenith

The weekly chart remains negative with the ETF below its key weekly moving average of $92.83. Weekly momentum declined to 57.95 last week. Buy weakness to the 200-week, simple moving average of $86.80. Sell strength to my quarterly risky level of $94.74.

Materials Sector SPDR Fund (XLB)
Materials Sector SPDR Fund (XLB)

Courtesy of MetaStock Xenith

The weekly chart remains neutral with the ETF above its key weekly moving average of $51.98. Weekly momentum slipped to 76.27. Buy weakness to my quarterly value level of $44.49. Sell strength to my semiannual risky level of $55.87.

Industrial Sector SPDR Fund (XLI)
Industrial Sector SPDR Fund (XLI)

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the ETF above its key weekly moving average of $65.07. Weekly momentum ended last week at 83.96, above the overbought threshold of 80.00. Buy weakness to my quarterly value level of $56.09. Sell strength to my annual risky level of $70.05.

Consumer Discretionary Sector SPDR Fund (XLY)
Consumer Discretionary Sector SPDR Fund (XLY)

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the ETF above its key weekly moving average of $85.99, and set a new all-time high of $87.74 on March 16. Weekly momentum reading ended last week at 91.64, above the overbought threshold of 80.00. Buy weakness to my quarterly value level of $84.35. Sell strength to my annual risky level of $97.00.

Consumer Staples Sector SPDR Fund (XLP)
Consumer Staples Sector SPDR Fund (XLP)

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the ETF above its key weekly moving average of $54.19. Weekly momentum ended last week at 91.41, above the overbought threshold of 80. Buy weakness to my quarterly pivot at $53.48. Sell strength to my annual risky level of $58.03.

Energy Sector SPDR Fund (XLE)
Energy Sector SPDR Fund (XLE)

Courtesy of MetaStock Xenith

The weekly chart remains negative with the ETF below its key weekly moving average of $71.79, and below its 200-week, simple moving average of $77.37, which capped the rally during the week starting last Dec. 16. Weekly momentum fell to 22.43 last week. Buy weakness to my quarterly value level of $59.87. Sell strength to my monthly risky level of $74.10.

Financial Sector SPDR Fund (XLF)
Financial Sector SPDR Fund (XLF)

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the ETF above its key weekly moving average of $24.20. Weekly momentum ended last week at 86.11, above the overbought threshold of 80. Buy weakness to my annual value level of $23.65. Sell strength to my semiannual risky level of $25.87.

Health Care Sector SPDR Fund (XLV)
Health Care Sector SPDR Fund (XLV)

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the ETF above its key weekly moving average of $73.36. Weekly momentum ended last week at 92.57, above the overbought threshold of 80. Buy weakness to my quarterly value level of $72.65. Sell strength to my annual risky level of $78.09.

Utilities Sector SPDR Fund (XLU)
Utilities Sector SPDR Fund (XLU)

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the ETF above its key weekly moving average of $50.27. Weekly momentum ended last week at 86.38, above the overbought threshold of 80. Buy weakness to my annual pivot of $50.72. Sell strength to my semiannual risky level of $54.29.

Technology Sector SPDR Fund (XLK)
Technology Sector SPDR Fund (XLK)

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the ETF above its key weekly moving average of $51.93. Weekly momentum ended last week at 96.71, above the overbought threshold of 80. Buy weakness to my semiannual value level of $49.24. Sell strength to my semiannual and annual risky levels of $53.45 and $55.49, respectively. The all-time intraday high of $53.61 set on March 16 is within this risky area.

iShares Transportation Average ETF (IYT)
iShares Transportation Average ETF (IYT)

Courtesy of MetaStock Xenith

The weekly chart remains negative with the ETF below its key weekly moving average of $167.42. Weekly momentum declined to 68.99 last week. Buy weakness to my annual value level of $142.48. Sell strength to my annual risky level of $182.54.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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