The past week saw no significant technical developments in the Basic Materials, Consumer Cyclical, Healthcare, Financials, Utilities, Energy or Real Estate Sectors.
U.S. Sector Updates
The past week saw no significant technical developments in the Basic Materials, Consumer Cyclical, Healthcare, Financials, Utilities, Energy, or Real Estate Sectors. Those that saw noteworthy movement are included below, in order of their relative strength ranking in the DALI domestic equity sector rankings. Sector designations are based on DALI sector rankings and are as follows: 1 - 3 overweight, 4 - 7 equal-weight, and 8 - 11 underweight.
Technology – Overweight, Improving
The technology sector has seen further improvement over the past week to advance into the 2nd ranked position out of the 11 sectors in our DALI sector breakdown. This garners an Overweight classification for the first time since mid-February 2022. Strength within the sector continues to originate with large-cap names like AAPL and MSFT leading major representatives higher. Semiconductors continue to show long-term strength when compared to most other sectors but have seen a near-term decline in participation. This may present some opportunities to gain exposure at normalized price levels. This could be through a broad semiconductor fund representative like SOXX or an individual name like AVGO, which have each consolidated over the past few weeks.
Industrial- Overweight
The industrial Group fell to third within the DALI Sector rankings this week, but it should be noted the tumble came more so at the hands of emerging strength from now overweight Technology than weakness from the Industrial sector. The SPDR Select Fund for the group maintains a strong 3.82 fund score and recently reversed back into X’s on its default chart. One stock to look towards on reversal into X’s is 5/5’er Howmet Aerospace (HWM).
Consumer Non-Cyclical- Equal Weight
Consumer Staples continue battling with Industrials for the third spot in DALI, this week slipping back to fourth. Small caps remain intra-sector leaders, evidenced via the constructive chart picture for PSCC. Meanwhile, PBJ and FTXG are currently testing positive trend lines that have been in place since April 2020 and 2011, respectively. ADM returned to a buy signal this week and MKC had its 16th-best trading day on record following an earnings beat.
Communication Services- Underweight
The Communication Services sector remains in the 10th position within the DALI rankings but has extended its lead of buy signals over now last-place Real Estate. In line with the more Tech Focused advance, names like Alphabet GOOGL and META META are the main standouts. Google recently returned into a column of X’s on its RS chart against SPXEWI for the first time in nearly a year, and META sits within one box of printing its first buy signal against the equal-weighted index in over 2 years.
