Technology Rules as Only S&P Sector Hitting a New High

The S&P 500's   11 sectors can be traded using exchange-traded funds. Since the presidential election, the ETFs for materials, industrial, energy, financial and transportation had been the leaders, but now as Inauguration approaches on Jan. 20, the dynamics are beginning to change.

Last week, the first week of 2017, showed a resurgence of momentum in sector exchange-traded funds dominated by big momentum stocks.

The consumer discretionary ETF gained 2.4% last week heavily-weighted by Amazon.com (AMZN) , which is 13.23% of this ETF. Amazon gained 5.8% last week.

The pledge to repeal and replace Obamacare helped the health care ETF gain 2.9% last week. Dow components Johnson & Johnson (JNJ) , Pfizer (PFE) , Merck (MRK) and UnitedHealth (UNH) are the four largest components of this ETF with weightings of 11.66%, 7.49%, 6.13% and 5.74%, respectively.

The technology ETF gained 2.2% last week led by its two largest components Apple (AAPL) and Microsoft (MSFT) . Apple is weighed at 13.63%, Microsoft by 10.6%.

Here's this week's scorecard for the 11 exchange-traded funds that represent each of the sectors of the S&P 500.

 

The SPDR Dow Jones REIT ETF (RWR) ended last week at $95.21, up 2% in the first week of 2017 and 8.8% below its all-time intraday of $104.34 set on July 29, 2016 and is 17.9% above its Feb. 11, 2016 low of $80.74.

Simon Property Group (SPG) is the largest component of this ETF and its major holdings include malls where anchor stores and other retailers are becoming empty. This is a warning to underweight this sector despite positive technicals.

The weekly chart for RWR is positive with the ETF above its key weekly moving average of $92.68 and above its 200-week simple moving average of $86.17. The weekly momentum reading rose to 51.62 last week up from 40.42 on Dec. 30.

Courtesy of MetaStock Xenith

Investors looking to buy the REIT ETF should do so on weakness to $86.17, which is the 200-week simple moving average. The $94.74 level should be a magnet through March. Investors looking to reduce holdings should consider selling strength to $99.70, which is a key level on technical charts until the end of January. Semiannual and annual risky levels are $101.09 and $112.38, respectively.

The Materials Select Sector SPDR Fund (XLB) ended last week at $50.62, up 1.9% in the first week of 2017, after setting its 52-week intraday high of $51.69 on Dec. 12, 2016. The ETF is in bull market territory 39.5% above its Jan. 20, 2016 low of $36.29.

The weekly chart for XLB is neutral with the ETF above its key weekly moving average of $49.72 and above its 200-week simple moving average of $45.98. The weekly momentum reading slipped to 77.77 last week down from 79.12 Dec. 30.

Courtesy of MetaStock Xenith

Investors looking to buy the materials ETF should do so on weakness to $49.43 and $44.49, which are key levels on technical charts until the end of January and the end of March, respectively. Investors looking to reduce holdings should consider selling strength to $55.87 and $61.72, which are key levels on technical charts until the end of June and until the end of 2017, respectively.

The Industrial Select Sector SPDR Fund (XLI) ended last week at $63.14, up 1.5% in the first week of 2017. This ETF set its all-time intraday high of $64.07 set on Dec. 7, 2016. This ETF is in bull market territory 34.9% above its Jan. 20, 2016 low of $46.82.

The weekly chart for XLI remains positive but overbought with the ETF above its key weekly moving average of $62.00 and above its 200-week simple moving average of $52.91. The weekly momentum reading slipped to 84.44 last week down from 84.92 Dec. 30, with both readings well above the overbought threshold of 80.00.

Courtesy of MetaStock Xenith

Investors looking to buy the industrial ETF should do so on weakness to $61.84 and $56.09, which are key levels on technical charts until the end of January and the end of March, respectively. Investors looking to reduce holdings should do so on strength to $70.05 and $71.67, which are key levels on technical chart until the end of 2017, and until the end of June, respectively.

The Consumer Discretionary Select Sector SPDR Fund (XLY) ended last week at $83.32, up 2.4% in the first week if 2017 and set its all-time intraday high of $84.68 on Dec. 13, 2016. The ETF is in bull market territory 23.3% above its Jan. 20. 2016.

The weekly chart for XLY is neutral with the ETF above its key weekly moving average of $81.96 and well above its 200-week simple moving average of $70.88. The weekly momentum reading fell to 73.96 last week down from 75.15 on Dec. 30.

Courtesy of MetaStock Xenith

Investors looking to buy the consumer discretionary ETF should do so on weakness to $81.30, which is a key level on technical charts until the end of January. Investors looking to reduce holdings should consider selling strength to $84.35, which is a key level on technical charts until the end of March. Annual and semiannual risky levels are $97.00 and $98.70, respectively.

The Consumer Staples Select Sector SPDR Fund (XLP) ended last week at $52.12, up 0.8% in the first week of 2017 and set its all-time intraday high of $56.02 on July 14, 2016. The ETF is up 10% from its Jan. 20, 2016 low of $47.39.

The weekly chart for XLP is positive with the ETF above its key weekly moving average of $51.84 and above its 200-week simple moving average of $47.15. The weekly momentum reading ended last week at 52.49 up from 45.97 on Dec. 30.

Courtesy of MetaStock Xenith

Investors looking to buy the consumer staples ETF should do so on weakness to $47.15, which is the 200-week simple moving average. Investors looking to reduce holdings should consider selling strength to $53.48 and $53.68, which are key levels on technical charts until the end of March and the end of January, respectively.

The Energy Select Sector SPDR Fund (XLE) ended last week at $75.89, up 0.8% in the first week of 2017. The ETF is in bull market territory 52% above its Jan. 20, 2016 low of $49.93. This ETF set its 2016 high of $78.45 on Dec. 12.

The weekly chart for XLE remains positive but overbought with the ETF above its key weekly moving average of $74.42, and below its 200-week simple moving average of $77.61, after being briefly above it during the week of Dec. 16. The weekly momentum reading slipped to 80.87 last week down from 82.64 on Dec. 30, still above the overbought threshold of 80.00.

Courtesy of MetaStock Xenith

Investors looking to buy the energy ETF should do so on weakness to $73.68, which is a key level on technical charts until the end of January. The $59.87 level is a value level until the end of March. Investors looking to reduce holdings should consider selling strength to $84.23, which is a key level on technical charts until the end of June.

The Financial Select Sector SPDR Fund (XLF) ended last week at $23.54, up 1.2% in the first week of 2017. The ETF is in bull market territory 48.4% above its Feb. 11, 2016 low of $15.86. This ETF set its multiyear intraday high of $23.87 on Dec. 15.

The weekly chart for XLF remains positive but overbought with the ETF above its key weekly moving average of $22.72 and above its 200-week simple moving average of $18.55. The weekly momentum reading stayed at 91.23 last week the dame as on Dec. 30, still well above the overbought threshold of 80.00.

Courtesy of MetaStock Xenith

Investors looking to buy the finance ETF should do so on weakness to $22.19 and $19.86, which are key levels on technical charts until the end of January and until the end of March, respectively. The $23.65 level is an annual pivot or magnet that was crossed last week. Investors looking to reduce holdings should consider selling strength to $25.87, which is a key level on technical charts until the end of June.

The Health Care Select Sector SPDR Fund (XLV) ended last week at $70.95, up 2.9% in the first week of 2017. The ETF is 13.2% above its Feb. 9, 2016 low of $62.68. This ETF is 6.6% below its Aug 1, 2016 high of $76.00.

The weekly chart for XLV is positive with the ETF above its key weekly moving average of $69.68 and above its 200-week simple moving average of $64.25. The weekly momentum reading rose to 49.93 last week up from 44.59 on Dec. 30.

Courtesy of MetaStock Xenith

Investors looking to buy the health care ETF should do so on weakness to $64.25, which is the 200-week simple moving average. Investors looking to reduce holdings should consider selling strength to $71.79, $72.65 and $78.09, which are key levels on technical charts until the end of January, the end of March and the end of 2017, respectively.

The Utilities Select Sector SPDR Fund (XLU) ended last week at $48.83, up 0.5% in the first week of 2017. The ETF is 7.9% below its July 6, 2016 high of $53.02, and is 17.7% above its Dec. 11, 2015 low of $41.50.

The weekly chart for XLU remains positive with the ETF above its key weekly moving average of $48.19 and above its 200-week simple moving average of $43.65. The weekly momentum reading rose to 57.78 last week up from 48.62 on Dec. 30.

 

Courtesy of MetaStock Xenith

Investors looking to buy the utilities ETF should do so on weakness to $46.26, which is a key level on technical charts until the end of March. Investors looking to reduce holdings should consider selling strength to $50.53 and $50.72, which are key levels on technical charts until the end of January and the end of 2017, respectively. A semiannual risky level is $54.29.

The Technology Select Sector SPDR Fund (XLK) ended last week at $49.40, up 2.2% in the first week of 2017, and in bull market territory 29.9% above its Jan. 20, 2016 low of $38.03. This ETF set its all-time intraday high of $49.47 on Jan. 6.

The weekly chart for XLK remains positive with the ETF above its key weekly moving average of $48.29 and well above its 200-week simple moving average of $39.73. The weekly momentum reading rose to 79.47 last week up from 76.36 on Dec. 30.

Courtesy of MetaStock Xenith

Investors looking to buy the technology ETF should consider doing so on weakness to $46.95, which is a key level until the end of March. Investors looking to reduce holdings should consider selling strength to $51.30, $53.45 and $55.49, which are key levels on technical charts until the end of January, the end of June and the end of 2017, respectively.

The iShares Transportation Average ETF (IYT) ended last week at $163.87, up 0.6% in the first week of 2017, and in bull market territory 42,5% above its Jan. 20, 2016 low of $114.91. This ETF set its all-time intraday high of $171.16 set on Dec. 9, 2016.

The weekly chart for IYT is positive but overbought with the ETF above its key weekly moving average of $161.18 and above its 200-week simple moving average of $139.96. The weekly momentum reading slipped to 82.43 last week down from 85.87 on Dec. 30, still above the overbought threshold of 80.00.

Courtesy of MetaStock Xenith

Investors looking to buy this ETF should do so on weakness to $155.40 and $130.09, which are key levels on technical charts until the end of January and the end of March, respectively. Investors looking to reduce holdings should do so on strength to $182.54 and $192.85, which are key levels on technical chart until the end of 2017 and the end of June, respectively.

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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