Technical Outlook - US Industry and Sector trends Technical Outlook - US Industry and Sector trends Technical Outlook - US Industry and Sector trends

Technical Outlook - US Industry and Sector trends

Equities 5 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Medium-term analysis of some of the main Industries and Sectors in USA. Charts are all weekly time period and ETF’s are being used.  
This Industry analysis is planned to be updated bi-weekly and/or when there are some interesting developments. This analysis is planned to be with just short comments and explanations with direction and key support and resistance levels.  

Source all charts and data: Saxo Group

Semiconductor
SOXX had formed an Inverted Shoulder-Head-Should and broken above the Neckline thus confirming the pattern with a potential target at around 501.
But for now SOXX has been rejected at the strong resistance at around 434.42. A test of the Neckline from the upper side could be seen. Such a scenario is not unusually, however (where price is testing the break out trendline from the other side) and it is called a Throw Back.
If price closes below the Neckline the S-H-S pattern is demolished and further down wards move should be expected, but if it is being rejected and resumes break out direction pattern is still valid.
If SOXX can close above the 434.42 resistance there is upside to 500.

Nvidia is the biggest company in the Sector so it pretty much decides the direction of the Sector.
See latest Nvidia analysis 

Industrial
Medium-term Industrial is forming a rising wedge like pattern which is normally a reversal pattern. RSI divergence indicates a reversal. A close below lower rising trendline will confirm a reversal.
However, Industrial is still in an uptrend and can move higher before breaking out bearish.
If RSI closes above its falling trendline it will strongly suggest Industrial will move towards previous peak at 107.88.

Energy
Energy is testing key support at around 82.65. A break below and Energy is testing the lower rising trendline. A break below the trendline a move down to around 66.68 is in the cards.
If Energy instead bounces from support it could resume uptrend.
55 weekly Moving Average acts a good guide for the medium-term trend. As long as Energy stays above the uptrend seems to be intact.

Oil & Gas
Uptrend seems to be reversed with the sector currently trading below the 55 Moving Average and below rising trendline. Oil & Gas sector seems set for a move to test minor support at 125 and strong support at around 114.85
To resume uptrend a close above 146.76 is needed. First indication of that scenario to play out could be RSI breaking above its falling trendline

Metals and Mining Industry
Still in an uptrend forming what appears to be a rising wedge pattern. However, there is no divergence on RSI indicating we are likely to see higher levels in Metals & Mining. Sector ETF is above both 21 and 55 weekly Moving Average adding to the bullish picture.
For Metals & Mining to reverse the trend a close below 48.48 is needed. A break below lower rising trendline could be first indication of that scenario to play out.

Financial
Financials is technically in an uptrend but is struggling for momentum. RSI is still below 60 and needs to close above for Financials to really take off. If Financials drops back below 55 weekly Moving Average the sector could resume downtrend . A down trend will be confirmed if closing below 33.19.

Transportation
If trading in a rising channel pattern. Uptrend intact but could be challenged if breaking below lower rising trendline. Transportation is back below 55 weekly Moving Average which could indicate a reversal of the uptrend.
If Transportation breaks below the lower trendline the support at 211.48 will be key. 200 weekly Moving Average will provide support    

Technology
Broken above medium-term falling trendline and has established an uptrend. However, RSI has not yet confirmed the uptrend so far failing to close above 60 threshold. If Technology closes back below the falling trendline the uptrend could be in jeopardy. A close below 120 will confirm down trend has resumed.
Uptrend resistance at around 152

Materials
Materials is in an uptrend but currently seems indecisive testing 55 weekly Moving Average from the upper side. If Materials closes below 55 Moving Average there is risk to the down side. Key support 76.65.
RSI has not managed to turn to positive sentiment being rejected at 60 threshold a couple of times. A close above will confirm the currently fragile uptrend with a potential to previous peaks around 90-92

Utilities
Is in an downtrend and seems set for a move down to around 200 weekly Moving Average. A break of the 200 Moving Average could push Utilities to test 2022 lows around 60.
RSI is showing negative sentiment  that could accelerate if RSI breaks back below 40. For Utilities to reverse the downtrend a close above 72.50 is needed. Support at 65.80

 

Retail
Was rejected at 75.80 after triangle break out. If Retail is likely to test the 55 weekly Moving Average and the falling trendline in the triangle. If closing back below the falling trendline there is a risk Retail could turn bearish . 200 weekly Moving Average will offer some support.
RSI is showing positive sentiment  indicating what we are seeing could just be a correction.


Health Care
Downtrend but RSI shows positive sentiment meaning it could just be a larger correction down to 0.381 retracement. However, a close below support at 127.80 is likely to push RSI into negative sentiment.
If Health Care closes above 134 it could be a good indication uptrend resumes. A close above 137.05 will add to the a bullish picture and if RSI closes back above 60 it will confirm uptrend has resumed.

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