Technical Analyst, Saxo Bank Group
Summary:
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 include just short comments and explanations with direction and key support and resistance levels.
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 bounced off support at around 82.65 and could be set to resume uptrend. If Energy moves back above 21 weekly Moving Average and RSI closes above 60 threshold there is likely to be further upside for Industrials.
A close below 82.65 and Energy is likely to test the lower rising trendline. With a break below the trendline a move down to around 66.68 is in the cards.
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
Oil & Gas is back above the rising trendline and the 55 Moving Average after a bounce from the support around 125.40.
If RSI closes above its falling trendline it will be a good indication that the sector will move higher. A close above 146.76 will confirm uptrend has resumed.
However, Oil & Gas could be forming a symmetrical triangle like pattern i.e. trading sideways in a more and more narrow range next few weeks.
Another break below the lower rising trendline followed by a close below 125.40 will confirm downtrend.
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
Transportation is trading in a rising channel pattern. Uptrend intact but could be challenged if breaking below lower rising trendline.
If Transportation breaks below the lower trendline the support at 223.30 will be key. 200 weekly Moving Average will provide support .
Retail
Was rejected at 75.80 after triangle break out. The uptrend is seriously challenged with retail currently below the 55 weekly Moving Average. If Retail closes below the 200
If Retail is likely to test the 55 weekly Moving Average and the falling trendline in the triangle it is likely to turn bearish.
RSI is still showing positive sentiment, however, indicating what we are seeing could just be a correction. But for now it is wait and see.
Health Care
Below 55 weekly Moving Average and dipped below 0.618 retracement and strong support at 127.80 only to close above. The close above the strong support is an indicating that Health Care could reverse the downtrend. RSI bounced off the 40 threshold i.e., still showing positive sentiment.
To push RSI into negative sentiment and extend the down trend a close below 127.80 is needed.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
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