Notable technical developments from Communication Services, Industrials, Utilities, Discretionary, Technology, Staples, Basic Materials, Real Estate, Healthcare, & Energy.
U.S. Sector Updates
The past week saw no significant technical developments in the Financials Sector. Those that saw noteworthy movement are included below, in order of their relative strength ranking in the DALI domestic equity sector rankings, as of 5/7/25. Sector designations are based on DALI sector rankings and are as follows: 1 - 3 overweight, 4 - 7 equal weight, and 8 - 11 underweight.
Communication Services – Overweight
Weekly Communications Video (3:37)
Broadly speaking, the communication services groups remains a point of strength against other sectors. More traditional telecom names continue to lead the way as roughly one of every two focused telecom stocks sits on a Point & Figure buy signal (second to only Utilities at 54% as of 5/7.) META remains technically actionable but has plenty of resistance up above. GOOGL (GOOG) slipped on reports that AI capabilities may challenge the previously entrenched "Search" revenue line. T is a name to look towards as it establishes support above old resistance from the past few years. Watch for reversals higher.
Industrials – Overweight
Weekly Industrials Video (3:03)
The industrials group remained somewhat insulated over the most recent market exhale, exactly what you would expect a high RS Sector to do- with that said, many representatives still have strong technical postures as we open May, but back and forth action does leave lots of resistance ahead for broad representative XLI. WLFC plummeted on the back of earnings and long exposure isn't favorable around current levels. PWR & CPRT look strong around current levels.
Utilities – Overweight
The Utilities Select Sector SPDR Fund (XLU) rallied 1.5% over the past week and returned to a buy signal by breaking a quadruple top at $81, shifting the trend back to positive during the process and increasing the ETF’s fund score up to 4.43. The bullish percent (^BPECUTILITY) and positive trend (^PTECUTILITY) both increased over the past week, suggesting stocks are continuing to return to a buy signals and shift back into a positive trend on their default point and figure charts. Constellation Energy (CEG) reported a miss on earnings but maintained forward guidance, leading the stock to climb and test the negative trend line. Vistra (VST) reported a Q1 loss during Wednesday's trading session, while NiSource NI beat and raised guidance. Notable earnings to monitor are Duke Energy (DUK) and Atmos (ATO).
Discretionary – Equal Weight
Weekly Discretionary Video (3:50)
While Discretionary stocks were down 76 basis points over the past one week roll by way of the Discretionary Select Sector SPDR Fund (XLY), action late last week saw the fund give a second buy signal on its default point and figure chart. The Textiles (DWATEXT), Autos & Parts (DWAAUTO), and Building (DWABUIL) industries were notable highlights as each was up more than 2%. The bullish percent for the broader sector (^BPECCONCYC) continued to climb, suggesting more stocks are returning to buy signals. Amazon AMZN reported earnings on Thursday last week, leading to a second buy signal on Friday before consolidating in the upper $180s, just below the middle of the 10-week trading band. Notable earnings to wrap up this week include Acushnet Holdings (GOLF), Carvana (CVNA), and DraftKings (DKNG).
Technology – Equal Weight
Weekly Technology Video (3:24)
Technology gained relative strength over the past week to move into the sixth position in our DALI sector rankings. This still leaves the sector with an equal weight recommendation, but the RS is heading in the right direction. The broad technology fund XLK has continued to demonstrate strength and is now testing its negative trend line. Further improvement to $220 would move it back to a positive trend. More technology stocks are moving to positive trends, as shown by a reversal higher in the ^PTECTECH indicator from 14% to 20%. AVGO was among these names to move back into a positive trend and shows an actionable technical picture with the recent pullback from rally highs Tuesday. PLTR also has shown consistent improvement, and has a favorable technical picture on its current pullback. NVDA is testing its trendline with three weeks to go until its earnings release. The stock would move back to a buy signal and positive trend with a move to $116 from the current position, while initial support is seen at $96.
Staples – Equal Weight
The Consumer Staples sector was roughly flat over the last week, seeing Select Sector SPDR Fund XLP gain 0.1%. However, action this week saw Staples fall behind Technology to the 7th spot within DALI’s sector rankings, but it maintains equal weight status for now. Within Asset Class Group Scores, the sector holds an acceptable average score of 3.38. Strength within Staples still resides more prevalently within mega caps, as the cap weighted XLP has a sizable 1.47-point fund score lead over the Invesco S&P Equal Weight Consumer Staples ETF (RSPS). Over last week, BellRing Brands (BRBR) plummeted on earnings to bring it down to a 3 for 5’er; it’s still ok to hold for now. Monster (MNST) also set new all-time highs and the strong 5 for 5’er reports earnings on the 8th.
Materials – Underweight
Basic materials remain in underweight territory in the DALI sector rankings and the Materials Select Sector SPDR fund has a weak technical picture with a fund score below 1.0. However, while the outlook for the broad sector is unfavorable, precious metals have been one of the most reliable areas of relative strength over the last several months.
Real Estate – Underweight
Weekly Real Estate Video (2:30)
Real Estate outpaced the market over the last week, seeing select sector SPDR fund XLRE gain 1.2%. However, the sector continues to lack from a relative strength perspective, maintaining its 9th position within DALI’s sector ranks. Within Asset Class Group Scores, the sector holds an average score of 2.72, which is below the acceptable 3.0 threshold. Long-term participation also remains lacking within the sector, as the Positive Trend for Real Estate (^PTECREALEST) sits in low territory at 25%. As such, the sector remains one to underweight for the time being. Over the last week, Essex Property Trust (ESS) and Regency Centers Corporation (REG) both returned to a positive trend, bringing them up to 4 for 5’ers.
Healthcare – Underweight
Weekly Healthcare Video (1:59)
Healthcare remains a weak sector as it places 10th in the DALI Sector Rankings. On the Asset Class Group Score Page, the sector has an average score of 1.29, well below the acceptable 3.0 threshold. The Health Care Select Sector SPDR ETF (XLV) reversed into a column of Os on Tuesday and was down -3.55% in the previous week (as of 5/6 close). XLV still maintains a weak fund score of 1.50 with strong negative score direction. On the broader level, the Positive Trend For Healthcare (^PTECHEALTH) remains in a column of Os and has a current reading of 16%, indicating low levels of participation. Continue to underweight Healthcare until the technical picture improves.
Energy – Underweight
Energy sits at the bottom of the DALI sector rankings and the technical picture for the Energy Select Sector SPDR Fund (XLE) remains unfavorable with a fund score below 2.0. Crude oil prices has stagnated near multi-year lows for the last several weeks, a major headwind for the sector; until oil prices begin to rebound, significant improvement in the sector could be elusive.
