Since the pandemic began, Consumer Discretionary and Technology stocks have consistently outperformed while Energy has lagged. Evident in the relative strength lines versus the S&P 500, these trends are still very much holding true, but there have been some interesting changes recently. For starters, Technology’s relative strength line remains in its uptrend—indicating outperformance relative to the S&P 500 over the past year—but at the start of this month the line put in a lower higher. Meanwhile, the relative strength line of Communication Services has been generally trending lower for some time now, but has more recently collapsed to some of its lowest levels since the spring.
Conversely, some other sectors have seen their trends turning around. Utilities and Real Estate are some of the most obvious examples of this with clear breakouts of their downtrends that have been in place for much of the past year. Health Care and Financials are now looking to join those two defensive sectors as they are right near their downtrend lines. Consumer Staples has also begun to trend slightly higher. Of the other sectors, the relative strength lines of Consumer Discretionary, Industrials, and Materials all continue to trend higher with some bounces in the past few days. Click here to view Bespoke’s premium membership options for our best research available.