7 of 11 S&P Sector ETFs Set Post-Election Highs, While Energy Sets Post-Election Low

The S&P 500 is divided into 11 sectors and each sector can be traded using its own exchange-traded fund. Technology sector has been the best performer since setting its post-election low. Stock market strength that began last week resulted in post-election highs for seven sector ETFs, while the energy sector set its post-election low.

The REIT ETF did not set a new high are the REIT ETF, but is on the cusp of having a positive weekly chart.

On the opposite side of the ledger is the financial ETF, which could end this week with a negative weekly chart. I explained why financial stocks have been volatile when I wrote about FDIC date last week, and profiled the four "too big to fail" money center banks, five super regional banks and 13 community banks.

The transportation sector ETF has a positive weekly chart, but is 3.3% below its post-election high.

One theme among the strong sectors is the concept that investors are employing a barbell investment strategy. The aggressive side of the barbell is the risky technology sector, and on the safety side of the barbell is the utilities sector because of the dividend yield. Technology continues to show strong momentum, but the utilities ETF has reached my price target of $54.29.

The materials and industrial sectors set post-election highs on hopes of infrastructure spending. Consumer discretionary and consumer staples set highs thanks to strength among from their largest components. The health care sector set its high in anticipation of the repeal and replacement of Obamacare.

Scorecard For 11 Exchange-Traded funds
Scorecard For 11 Exchange-Traded funds

The technology ETF remains the big winner with a gain of 18.4% year-to-date. In second place is consumer discretionary with a gain of 13%. The energy sector is the biggest loser, down 13.4% year-to-date, and in correction territory 16.9% below its Dec. 12 high of $78.45. Six of the 11 sectors are leading the year-to-date gain of 8.8% for the S&P 500.

When looking at the weekly charts below, keep an eye on the 200-week simple moving averages shown in green. Investors should consider this level as the "reversion to the mean". The "reversion to the mean" is an investment theory that the price or an index, stock or ETF, will eventually return to a longer-term simple moving average, and the 200-week is simple to track. A ticker trading above its "reversion to the mean" will eventually decline back to it on weakness. Similarly, a ticker trading below its "reversion to the mean" will eventually rebound to it on strength.

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

Courtesy of MetaStock Xenith

The weekly chart for the REIT Sector (RWR) ETF ($92.53 on June 5) will be upgraded to positive given a close on Friday above its five-week modified moving average of $92.39. The 200-week simple moving average is the "reversion to the mean" at $87.70. Weekly momentum is projected to uptick to 39.40 this week up from 36.87 on June 2. Buy weakness to my quarterly value level of $90.33. My weekly pivot is $31.95. My monthly value level is $85.96 with semiannual risky level of $101.09.

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

Courtesy of MetaStock Xenith

The weekly chart for the Materials Sector (XLB) ETF ($53.68 on June 5) is positive with the ETF above its five-week modified moving average of $53.00. The 200-week simple moving average is the "reversion to the mean" at $47.38. Weekly momentum is projected to rise to 71.66 this week up from 65.10 on June 2. Buy weakness to my quarterly value level of $45.70. My weekly pivot is $53.13. Sell strength to my monthly and semiannual risky levels of $54.97 and $55.87, respectively. My quarterly value level is $45.70 with my annual risky levels of $61.72.

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

Courtesy of MetaStock Xenith

The weekly chart for the Industrial Sector (XLI) ETF ($67.97 on June 5) is positive but overbought with the ETF above its five-week modified moving average of $66.82, The 200-week simple moving average is the "reversion to the mean" at $55.39. Weekly momentum is projected to rise to 83.86 this week moving above the overbought threshold of 80.00. Buy weakness to my quarterly value level of $59.60. My weekly pivot is $67.98. Sell strength to my monthly, annual and semiannual risky levels of $69.96, $70.05 and $71.67, respectively.

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

Courtesy of MetaStock Xenith

The weekly chart for the Consumer Discretionary Sector (XLY) ETF ($91.99 on June 5) remains positive but overbought with the ETF above its five-week modified moving average of $90.14. The 200-week simple moving average is the "reversion to the mean" at $74.34. Weekly momentum is projected to remain above the overbought threshold of 80.00 at 88.26. Amazon.com (AMZN) is by far the largest component of this ETF with a weighting of 15.3% and is trading above $1,000 a share. Buy weakness to my quarterly value level of $85.41. My monthly and weekly pivots are $91.66 and $92.60, respectively. Sell strength to my annual and semiannual risky levels of $97.00 and $98.70, respectively.

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

Courtesy of MetaStock Xenith

The weekly chart for the Consumer Staples Sector (XLP) ETF ($57.33 on June 5) is positive but overbought with the ETF above its five-week modified moving average of $55.99. The 200-week simple moving average is the 'reversion to the mean" at $48.70. Weekly momentum is projected to rise to 84.13 moving above the overbought threshold of 80.00. Buy weakness to my monthly value level of $54.75. My quarterly and weekly pivots are $55.16 and $56.76, respectively. Sell strength to my annual and semiannual risky levels of $58.03 and $61.19, respectively.

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

Courtesy of MetaStock Xenith

The weekly chart for the Energy Sector (XLE) ETF ($65.21 on June 5) is negative but oversold with the ETF below its five-week modified moving average of $67.14. This ETF is below its 200-week simple moving average, or "reversion to the mean" of $76.50, last tested during the week of Dec. 16, when the average was $77.65. Weekly momentum is projected to end this week declining to 15.08 falling further below the oversold threshold of 20.00. Buy weakness to my quarterly value level of $58.54. My weekly pivot is $64.06. Sell strength to my monthly risky level of $69.67.

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

Courtesy of MetaStock Xenith

The weekly chart for the Financial Sector (XLF)  ETF ($23.49 on June 5) will be upgraded to positive if the ETF ends the week above its five-week modified moving average of $23.54. The 200-week simple moving average is the "reversion to the mean" at $19.43. Weekly momentum is projected to uptick to 29.06 up from 27.24 on June 2. Buy weakness to my quarterly value level of $21.40. My weekly and annual pivots are $23.34 and $23.65, respectively. Sell strength to my semiannual and monthly risky levels of $25.87 and $26.72, respectively.

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

Courtesy of MetaStock Xenith

The weekly chart for the Health Care Sector (XLV) ETF ($77.20 on June 5) has a positive weekly chart with the ETF above its five-week modified moving average of $75.84. The 200-week simple moving average is the "reversion to the mean" at $67.11. Weekly momentum is projected to rise to 79.84 this week up from 74.34 on June 2. Buy weakness to my monthly and quarterly value levels of $72.91 and $70.15, respectively. My weekly pivot is $76.74. Sell strength to my annual risky level of $78.09.

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

Courtesy of MetaStock Xenith

The weekly chart for the Utilities Sector (XLU) ETF ($54.11 on June 5) remains positive but overbought with the ETF above its five-week modified moving average of $52.74. The 200-week simple moving average is the "reversion to the mean" at $44.99. Weekly momentum is projected remain above the overbought threshold of 80.00 at 89.72. Buy weakness to my monthly, quarterly and annual value levels of $52.43, $51.19 and $50.72, respectively. Sell strength to my semiannual risky level of $54.29, which was doable last week and at Monday's open.

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

Courtesy of MetaStock Xenith

The weekly chart for the Technology Sector (XLK) ETF ($57.24 on June 5) remains positive but overbought with the ETF above its five-week modified moving average of $55.51. The 200-week simple moving average is the "reversion to the mean" at $42.17. Weekly momentum is projected to remain well above the overbought threshold of 80.00 at 93.43. The top two components in this ETF are Apple Inc. (AAPL) and Microsoft (MSFT) with weightings of 15.1% and 10.5%, respectively. Buy weakness to my semiannual and quarterly value levels of $53.45 and $50.61, respectively. My monthly and annual pivots are $55.88 and $55.49, respectively. Investors should consider reducing holdings at my weekly pivot of $57.26, tested at Monday's high.

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

Courtesy of MetaStock Xenith

The weekly chart for the Transportation Sector (IYT) ETF ($168.13 on June 5) is positive with the ETF above its five-week modified moving average of $165.36. The 200-week simple moving average is the "reversion to the mean" at $145.83. Weekly momentum is projected to rise to 53.58 up from 40.93 on June 2. Buy weakness to my quarterly value level of $139.43. My weekly pivot is $164.875. Sell strength to monthly and annual risky levels of $180.00 and $182.54, respectively.

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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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