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Below is a look at our trading range charts for the ten main S&P 500 sectors (REIT sector excluded). For each chart, the dark line represents price, while the white line represents the 50-day moving average. The light blue shaded area represents each sector’s “normal” trading range, which is between one standard deviation above and below the 50-DMA. Moves into the red zone are considered overbought, while moves into the green zone are considered oversold.
Most cyclical sectors are currently trading in nice uptrends, but you’ll notice that the two main defensive sectors — Consumer Staples and Utilities — both recently broke above the top of their downtrend channels. Health Care recently broke above its downtrend channel as well. Another sector worth highlighting is Energy. After breaking above a tight range following the election, the Energy sector has pulled back to a key support level. If it can hold above this support in the coming days, it should represent an attractive entry point. If it doesn’t hold, look for a move back down to the bottom of its prior sideways channel.