Notable technical developments from Communication Services, Financials, Utilities, Technology, Discretionary, Staples, Basic Materials, Real Estate, Healthcare, & Energy.
U.S. Sector Updates
The past week saw no significant technical developments in the Industrials 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 5/14/2025. 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 (3:03)
Communication Services remains a strong option from a pure sector perspective. The group continues to flex its muscles atop the sector DALI rankings, ranking first out of the 11 broad sectors as of 5/14. Broad representative XLC has improved nicely off of 2025 lows, returning to a PnF buy signal on its default chart and moving back to a column of X's on a 3.25% Relative Strength chart. Despite its strength, there are a handful of landmines in the sector to be aware of when picking up exposure. Google (GOOG & GOOGL) remains a poor attribute name. Comcast (CMCSA) is a poor attribute name that moved higher, take that as a chance to trim. Walt Disney broke back into a positive trend, but buyer beware, the stock is not the "fairest of them all."
Financials – Overweight
Weekly Financials Video (3:19)
Financials has been a top-three ranked DALI sector for almost a year, highlighting the area's consistent relative strength picture. The Financial Select SPDR Fund (XLF) possesses a strong fund score above 4.0 and trades right below resistance of all-time highs. Bank representative, SPDR S&P Bank ETF (KBE), returned to a positive trend on May 12th but still has a poor fund score below 3.0.
Utilities – Overweight
Though broader Utilities pulled back during the past one-week roll (5/6 – 5/13), both XLU and RSPU continue to maintain current chart positions near their breakout levels from early last week. The 10-week indicator for the broader sector (^TWECUTILITY) reversed into Os, suggesting stocks within the sector have moved below their 50-day moving average, but intermediate and long-term indicators such as the bullish percent (^BPECUTILITY) and positive trend (^PTECUTILITY) still maintain high readings and a column of Xs. Within industries like Gas Utilities though, indicators like the bullish percent (^BPGUTI) and positive trend (^PTGUTI) have reversed into Os during this week’s trading. Suggesting stocks within the small group are beginning to give sell signals and shift their trends back to negative. Additionally, the RS in Xs indicator (^RSXGUTI), which measures the percentage of stocks maintaining positive near-term market RS against the S&P 500 Equal Weight Index (SPXEWI), shifted back into a column of Os following Tuesday’s (5/13) action. While most Gas Utilities stocks maintain positive technical pictures, some have begun to see breakdowns as suggested by the indicators. On the earnings front, NRG Energy (NRG) reported a beat along with announcing an acquisition during Monday’s (5/12) trading. The stock rallied to a new all-time chart high at $158 and now trades in extremely overbought territory.
Technology – Equal Weight
Weekly Technology Video (3:31)
Technology gained further relative strength on Monday to move up into the fifth position in the DALI sector rankings, placing it back inside the top half of the sectors for the first time since April 3. XLK was the second best performing broad sector fund on Monday and is the best performing over the trailing month. The Ten Week for Technology (^TWECTECH) advanced up to 72% for the first time since late 2023, highlighting a sharp rise in near-term participation. Semiconductors have been a catalyst for recent improvement as the space bounces back from the significant declines posted in the beginning of the year. Software names have been more resilient and shown more consistent improvement.
Discretionary – Equal Weight
Weekly Discretionary Video (3:36)
Discretionary stocks have been positive during this one-week roll (5/6 – 5/13) with the Discretionary Select Sector SPDR Fund (XLY) rallying just shy of 9% to move above $215 on the ETF’s point and figure chart. Monday’s action brought notable increases to indicators for the broader sector with the 10-week (^TWECCONCYC) and bullish percent (^BPECCONCYC) increasing to 64% and 40%, noting stocks moving above their 50-day moving average and returning to a buy signal. The longer-term positive trend (^PTECCONCYC) indicator reversed back into Xs following last Wednesday’s (5/7) and the RS in Xs indicator (^RSXECCONCYC), which measures the percentage of stocks maintaining positive near-term market RS against the S&P 500 Equal Weight Index (SPXEWI), shifted back into a column of Xs following Friday’s (5/9) action. All told, there has been a notable shift in stocks showing positive technical improvement within the broader sector. Among those is Carvana (CVNA), which beat on earnings last week and rallied to a multi-year high during intraday action Wednesday (5/14). Planet Fitness (PLNT) and Expedia (EXPE) reported mixed earnings results last week but continue to maintain positive overall technical pictures. Walmart’s (WMT) earnings on Thursday (5/15) before the opening will highlight the week.
Staples – Underweight
Consumer Staples had a down week, seeing Select Sector SPDR Fund XLP fall 1.7% to lag the S&P 500 by 6.7%. The sector’s underperformance resulted in several notable relative strength changes. XLP reversed into a column of Os versus the S&P 500 Equal Weight (SPXEWI), bringing its fund score down to an unacceptable 1.95. Staples now holds an average score of 2.32 in Asset Class Group Scores—a full point lower than the week prior. The sector maintained its 7th spot in DALI, but it also lost 16 signals over the last week, placing it within 5 signals of falling further in rank. Broadly speaking, Staples are trending in the wrong direction and are holding onto their equal weight status by a thread.
Materials – Underweight
The Materials Select Sector SPDR Fund (XLB) was up just under 3% over the last week. Precious metals remain one of the strongest areas within materials but weighed on performance in the short-term as the VanEck Gold Miner’s ETF (GDX) fell more than 8% over the last week. GDX fell to a sell signal on its default chart when it broke a double bottom at $46.50. While precious metals have underperformed in the short-term the GDX has a favorable fund score north of 4.5, while the outlook for the broader sector remains weak as materials rank eighth in the DALI sector rankings and XLB has a fund score below 1.0.
Real Estate – Underweight
Weekly Real Estate Video (2:45)
Despite a strong performance from the market, the Real Estate sector was unable to do much this past week, as the Select Sector SPDR Fund (XLRE) fell 1.2%. However, we did see a reversal in the sector’s PT indicator (^PTECREALEST), which is a positive sign for its long-term participation. Outside of that, the sector held its 9th rank in DALI and while falling further in Asset Class Group Scores, with the group now holding an average score of 2.46. Given its lack of long-term strength, in addition to its poor near-term performance, the sector remains one to underweight for the time being.
Healthcare – Underweight
Weekly Healthcare Video (3:17)
The Healthcare sector Experienced some technical deterioration over the past week. The Health Care Select Sector SPDR Fund (XLV) has a fund score of 1.32 (as of 5/13) and moved to a sell signal after it broke a double bottom on Wednesday at $130. In DALI, the healthcare sector lost a few signals and is still an unfavored sector. UnitedHealth Group Incorporated (UNH) is a 0 for 5’er, but the Weekly OBOS indicates that the stock is in oversold territory and is likely to normalize in the near term. HCA Healthcare Inc. (HCA) is a 5 for 5’er and continues to improve. HCA’s next level of resistance is located at its previous all-time high of $416.
Energy – Underweight
The Energy Select Sector SPDR Fund (XLE) was up 6.5% over the last week, outpacing the S&P 500 (SPX). The rally comes as crude oil gained 7.75% over the last seven days. XLE gave a second consecutive buy signal on its default chart with a spread triple top break at $84 and now sits one box below its bearish resistance line. While XLE has shown modest improvement recently, it has an unfavorable fund score and energy remains at the bottom of the DALI sector rankings. Meanwhile, crude oil sits on a sell signal and in a negative trend near multi-year lows.
