Tuesday, June 24, 2014

Sectorbreadth Analysis: Utilities and Energy Leading

The summer rally has proven to be a boon for Energy and Utility stocks. According to my #sectorbreadth analysis, both Utilities ($XLU) and Energy ($XLE) are in covered call 'sell' territory, with Momentum, Trend and Volume indicators all above 90% bullish territory.  The September $44 strike call for $XLU traded at $0.65, and the September $102 strike call for $XLE at $2.20.

The only sector cut from the pack is Consumer Discretionary ($XLY). While not in strong buy territory (I like to see all my breadth indicators below 10% for that), it may offer itself as a bargain bin opportunity for the summer on rotation out of overheated Energy and Utility stocks.


You can access the interactive sectorbreadth chart here.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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