These 3 Sector ETFs Could End the S&P 500's Week Badly

NEW YORK (TheStreet) -- The Standard & Poor's 500 will end this week badly, from a technical perspective, if it closes Friday below its key weekly moving average of 2,103.6.

Here are three sector ETFs that could push the S&P down.

The Energy Select Sector SPDR Fund (XLE) is down 2.9% for the year to date, underperforming the S&P's 3.3% gain. Another market drag is the Utilities Select Sector SPDR Fund (XLU), which is down 9.5% for the year to date.

The third negative ETF is the iShares Transportation Average  (IYT), which is down 7.9% year to date. Its weekly chart has become oversold.

Let's look at the weekly charts for the three negative sector ETFs and provide trading guidelines.

Here's the weekly chart for the Energy ETF.


Courtesy of MetaStock Xenith

The Energy ETF, at $77, is down 2.7% year to date after trading as low as $71.70 on Jan. 14. This ETF is below its 50-day and 200-day simple moving averages of $80.15 and $82.13, respectively.

The weekly chart stays negative if the ETF ends the week on June 12 below its key weekly moving average of $79.22. This ETF is also below its 200-week simple moving average at $79.13. This ETF has been trading around its "reversion to the mean" since the week of Oct. 1

Investors looking to buy the energy ETF should place a good till canceled limit order to purchase the ETF drops to $75.97, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good till canceled limit order to sell the ETF if it rises to $83.54, which is a key level on technical charts until the end of 2015.

Here's the weekly chart for the Utilities ETF.


Courtesy of MetaStock Xenith

The utilities ETF, at $42.65, is down 9.6% year to date and traded as low as $42.37 on June 9. This ETF is below its 50-day and 200-day simple moving averages of $44.16 and $44.94, respectively.

The weekly chart will be negative if the ETF ends the week on June 12 below its key weekly moving average of $43.92. This ETF has been above its 200-week simple moving average since the week of August 26, 2011 when this average was $32.28. This moving average is now $39.10 as the "reversion to the mean".

Investors looking to buy the utilities ETF should place a good till canceled limit order to purchase the ETF if it drops to $38.18, which is a key level on technical charts until the end of 2015.

Investors looking to reduce holdings should place a good till canceled limit order to sell the ETF if it rises to $43.47, which is a key level on technical charts until the end of June.

Here's the weekly chart for the Transportation ETF.


Courtesy of MetaStock Xenith

The Transportation ETF, at $151, is down 7.8% year to date after trading as low as $148.31 on June 9. This ETF is below a "death cross" with its 50-day simple moving average of $154.48 below its 200-day simple moving averages of $156.94.

The weekly chart is negative but oversold with the ETF below its key weekly moving average of $153.97. This ETF has been above its 200-week simple moving average since the week of Oct. 7, 2011 when this average was $77.84. This moving average is now $118.73 as the "reversion to the mean".

Investors looking to buy the transportation ETF should place a good till canceled limit order to purchase the ETF drops to $145.12, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good till canceled limit order to sell the ETF if it rises to $162.98, which is a key level on technical charts until the end of June.

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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