Powerhouse ETFs: Energy, Consumer Staples and Utilities Outperform

NEW YORK (TheStreet) - Today we "crunch the numbers" on the 11 Exchange Traded Funds (ETFs) we have been profiling for investors as alternatives to stock picking.

Investing in ETFs smooths stock-specific volatility. This volatility was clearly illustrated during our coverage of first quarter earnings. It is difficult to pick stocks when many stocks have double-digit year-to-date gains or losses pre-earnings and/or double-digit gains or losses post-earnings.

The profiles below provide trading guidelines for 11 ETFs. Two "crunching the numbers" tables follow on page 2 and 3.


Materials Sector SPDR Fund (XLB) ($47.75, up 0.4% since April 1) set a new all-time intraday high at $48.34 on April 4 and is currently above all five key moving averages in today's first table. The weekly chart is neutral, with its five-week modified moving average at $47.13. Quarterly and semiannual value levels are $45.24 and $43.29, respectively, with a semiannual pivot at $47.54 and monthly risky level at $50.71.

Industrial Sector SPDR Fund (XLI) ($53.01, up 0.6% since April 1) set an all-time intraday high at $53.48 on April 4 and is above all five key moving averages in today's first table. The weekly chart is positive, with its five-week MMA at $52.30. Semiannual and quarterly value levels are $51.27 and $50.99, respectively, with a weekly pivot at $53.30 and monthly risky level at $57.79.

Consumer Discretionary SPDR Fund (XLY) ($63.84, down 2.7% since April 1) set an all-time intraday high at $67.85 on March 7 and has been moving sideways to down since then, as consumers shy away from discretionary spending. This ETF traded as low as $61.84 on April 15 and is now just above its 200-day SMA at $63.19. The weekly chart is negative, with its five-week MMA at $64.17. Semiannual value levels are $65.13 and $63.58 with quarterly and monthly risky levels at $66.98 and $70.90, respectively.

Consumer Staples SPDR Fund (XLP) ($44.51, up 3.5% since April 1) set an all-time intraday high at $44.52 on May 9, as consumers still spend on necessities. This ETF is above all five key moving averages in today's first table. The weekly chart is positive but overbought, with its five-week MMA at $43.45. Semiannual and annual value levels are $43.27 and $40.69, respectively, with a quarterly pivot at $44.55 and monthly risky level at $45.56.

iShares US Consumer Services (IYC) ($118.84, down 2.4% since April 1) set an all-time intraday high at $124.99 on March 7, then traded as low as $114.71 on April 15 holding its 200-day SMA at $115.76. The weekly chart is negative, with its five-week MMA at $119.13. Semiannual value levels are $117.62 and $114.14 with quarterly and monthly risky levels at $124.92 and $132.06, respectively.

Energy Sector SPDR Fund (XLE) ($93.67, up 4.6% since April 1) set an all-time intraday high at $95.25 on May 7, and is above all five key moving averages in today's first table. Note that crude oil is well below its all time high at $147.27 per barrel set in July 2008. The weekly chart is positive but overbought, with its five-week MMA at $91.14. Semiannual and annual value levels are $90.62 and $89.37, respectively, with monthly and annual risky levels at $94.43 and $94.88, respectively.

Finance Sector SPDR Fund (XLF) ($21.93, down 2% since April 1) set a multiyear intraday high at $22.65 on March 21, then traded as low as $21.19 on April 11. The weekly chart shifts to negative on a close this week below its five-week MMA at $21.88. Semiannual value levels are $20.24 and $19.44, with quarterly and monthly risky levels at $22.14 and $23.11, respectively.

Healthcare Sector SPDR Fund (XLV) ($57.82, down 1.8% since April 1) set an all-time intraday high at $60.49 on March 6, then traded as low as $55.39 on April 14. The weekly chart is positive, with its five-week MMA at $57.51. Semiannual value levels are $50.34 and $49.67, with quarterly and weekly risky levels at $58.98 and $61.96, respectively.

Utilities Sector SPDR Fund (XLU) ($42.26, up 2.6% since April 1) set a multiyear intraday high at $43.52 on May 1, then traded as low as $42.24 on May 9. The weekly chart is positive but overbought, with its five-week MMA at $41.76. Annual value levels are $41.19 and $39.12 with monthly and weekly risky levels at $42.86 and $42.91, respectively.

Technology Sector SPDR Fund (XLK) ($36.33, down 1.2% since April 1) set a multiyear intraday high at $36.93 on April 3, then traded as low as $35.13 on April 15 and is above all five key moving averages shown in the first table. The weekly chart is positive, with its five-week MMA at $36.00. Quarterly and semiannual value levels are $34.23 and $34.04, respectively, with a semiannual pivot at $35.92 and monthly risky level at $38.67.

iShares Dow Transportation (IYT) ($138.17, up 1.1% since April 1) set an all-time intraday high at $139.45 on April 24, and is above all five key moving averages in today's first table. The weekly chart is positive, with its five-week MMA at $135.47. Quarterly and semiannual value levels are $132.17 and $131.89, respectively, with a weekly pivot at $137.20 and monthly risky level at $145.31.


Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics

This table provides the technical status for the stocks profiled in today's report.

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: Stocks below a moving average are listed in red.

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (Even Apple declined to its 200-week SMA in June 2013.)

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (Even Apple tested or crossed its 200-day SMA in nine of the last 10 years.)


Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell

This table presents the EPS estimates including date and before or after the close, and where to buy on weakness and where to sell on strength.

EPS Date is the day the company reports their quarterly results.

EPS Estimate is the earnings per share estimate from Wall Street analysts.

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

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At the time of publication the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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