The past week saw no significant technical developments in the Technology, Industrial, Basic Materials, Consumer Cyclical, Consumer Non-Cyclical, Healthcare or Energy Sectors. Those that saw noteworthy movement are included below.
U.S. Sector Updates
The past week saw no significant technical developments in the Technology, Industrial, Basic Materials, Consumer Cyclical, Consumer Non-Cyclical, Healthcare or Energy 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.
Financials – Underweight, Improving
Financials have started to pick up steam over the last several weeks which has led the group to move higher in the DALI sector rankings. While the sector remains in underweight territory, banks have perked up after dragging down the sector for much of the year. The financial-banks group on the Asset Class Group Scores page has one of the highest score directions in the entire system. Despite the recent push higher, financial-banks still have a poor average score of 2.38, one of the worst sector scores. Nonetheless, the recent improvement shouldn’t be overlooked and the sector will look to build on positive movement in the short term.
Communication Services- Underweight
Despite remaining in underweight territory this week, there are several positive traits about the sector as a whole one could look towards going forward. XLC, the representative for the sector has continued to improve as tech-tilted names drag the sector forwards. Namely, strong results from META last week have been a strong catalyst as the stock continues to rocket forwards. From a more traditional comm services sense, a look at TMUS reveals recent weakness for the stock. Although it earns 4/5 attributes it may be prudent to avoid the name for the time being as its run into heavy overhead resistance.
Utilities- Underweight
Utilities fell in the DALI sector rankings over the past week, now only sitting above Real Estate, and the sector has remained an underweight consistently since June. SPDR Fund XLU reversed down today after testing its bearish resistance line, confirming price weakness.
Real Estate- Underweight
Real Estate lost another signal in the DALI sector rankings this week, maintaining its basement position. SPDR Fund XLRE has been unable to break past its long-term downtrend line despite relatively high underlying stock participation. The self-storage subsector has been of particular weakness, evidenced by PSA and EXR. SPG is a big weight in the sector with earnings today (8/2) after close; the technical picture looks constructive heading into the report.
