Notable technical developments from Communication Services, Financials, Industrials, Discretionary, Basic Materials, Staples, Real Estate, Healthcare, & Energy.
U.S. Sector Updates
The past week saw no significant technical developments in the Utilities or the Technology 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 5/28/25.
Note that all Sector Updates can be found in the Research Hub under "Domestic Equities". Click here for more information about our newest research offering. This new view provides a much cleaner display for the Sector Commentary & Videos, while also allowing us to update the commentary any day. This report article will be phased out at the end of May, but the same timely commentary will continue to be available on the Research Hub.
Communication Services – Overweight
Weekly Communications Video (3:15)
The broader communication services sector remains a point of relative strength so far this year. The group maintains its position at the top of the intra-sector DALI rankings. There are a handful of interesting technical pictures worth watching in the near term, most notably for Google (GOOGL & GOOG) which is a 3/5'er nearing a test of old resistance in the mid- 160's. Attractive names within the sector include AT&T (T), comm services/discretionary hybrid Take Two Interactive (TTWO) and 2025's high flier (NFLX). All remain attractive options at/around current levels.
Financials – Overweight
Weekly Financials Video (3:01)
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. Regional bank representative, SPDR S&P Bank ETF (KRE), is testing its bearish resistance line but still has a poor fund score below 3.0.
Industrials – Overweight
Weekly Industrials Video (3:51)
Industrials remains a technical overweight by NDW's DALI rankings, but the sector isn't particularly close to first & second placed comm services & financials groups. International stocks have been strong representatives in 2025, and those looking for said exposure within the industrials sector could look towards (IGF). Boeing (BA) is having a nice year but is a tad extended, look for a re-test of old resistance around $190 in the near term. Transports remain quite weak, evidenced by Old Dominion Freight Line (ODFL) which is a 2/5'er trading below a previously key trading range. (WAB) & (PWR) remain technically strong options to look towards this week.
Discretionary – Equal Weight
Weekly Discretionary Video (5:08)
Discretionary stocks were mixed over the past week (5/20 – 5/27) with large caps (XLY) up 39 basis points and small caps (PSCD) were down over 2.5%. Short-term indicators like the 10-week (^TWECCONCYC) and percent weekly momentum (^MOECCONCYC) reversed into Os late last week, while positive action early this week brought 10-week charts back into Xs as stocks hover around their 50-day moving average. The one bullish percent reversal within subsector/industries within the broader sector was the BP for Building (^BPBUIL) fell into Os, while funds like the iShares Home Construction ETF (ITB) returned to a sell signal and move back into a negative trend. Ralph Lauren (RL), Abercrombie & Fitch (ANF), and Dick’s Sporting Good (DKS) report positive earnings and either raised or confirmed guidance. ANF and DKS rallied notably off recent lows with ANF gaining more than 30% intraday on Wednesday (5/28). Notable earnings upcoming include Costco (COST) following Thursday’s close.
Materials – Underweight
Basic materials moved up to seventh in the DALI sector rankings overtaking consumer non-cyclicals. Even with the move up to seventh, materials remain in underweight territory and the Materials Select Sector SPDR Fund (XLB) has a fund score below 1.0. Despite the weakness of the broad sector, precious metals, especially gold, have been one of the most reliable areas of relative strength in US equities this year. The VanEck Gold Miners ETF (GDX) has gained more than 40% this year and has a fund score north of 5.0.
Staples – Underweight
Consumer Staples were relatively flat over the last week, but we did see the sector fall behind Basic Materials within DALI’s rankings, bringing it into firm underweight territory at the 8th spot. Staples look similarly poor within Asset Class Group Scores, as it holds an average score of 2.62, which is also eight among the 11 major sectors. While the group has weakened relative to other sectors, we did see an uptick in the positive trend for staples (^PTECCONNONCYC), indicating some improvement in long-term participation. Phillip Morris (PM) continues to be one of the strongest names within the sector but might be better suited to add on a pullback or consolidation given its overbought reading north of 75%. Meanwhile, Rollins (ROL) is high attribute name trading in actionable territory.
Real Estate – Underweight
Weekly Real Estate Video (2:24)
Real Estate continues to sit in the lower half of our relative strength rankings, with it currently holding the 9th rank among major sectors within both DALI and Asset Class Group Scores. Given its long-term weakness and lack of improvement, it remains an area to underweight for the time being. Those seeking to add exposure could look towards Simon Property Group (SPG) or Welltower (WELL), which are both strong 5 for 5’er trading in actionable territory
Healthcare – Underweight
Weekly Healthcare Video (3:37)
The Healthcare Sector remained flat over the past week. On the Asset Class Group Score page, the Biotechnology and Healthcare groups still rank near last place. In DALI, the Healthcare sector still remains unfavored and ranks in the tenth position, just above the Energy sector. After reversing into Xs this month, the Ten Week for Healthcare (^TWECHEALTH) remained flat this past week with a chart level of 48%. Long-term, the Pos Trend for Healthcare (^PTECHEALTH) is still in a column of Os, indicating that the long-term technical picture for the healthcare sector is weakening. The Healthcare Select Sector SPDR Fund (XLV) remained flat over the past week and still maintains a very weak fund score of 1.25. Continue to underweight the Healthcare Sector for now. Abbott Laboratories (ABT) is on its second consecutive buy signal, after breaking a double top at $136 earlier this month. The stock is a 4 for 5'er and is accompanied by a yield of 1.8%.
Energy – Underweight
There has been little material change in the energy sector over the last couple of weeks. Energy remains at the bottom of the DALI sector rankings and the Energy Select Sector SPDR Fund (XLE) has an unfavorable fund score south of 2.0. Meanwhile, crude oil remains in the low $60s and has encountered strong resistance around $64-$65.
