April got off to a strong start yesterday, moving the majority of major index ETFs out of neutral territory and into overbought levels. Currently, there are only three ETFs that are still neutral while the remaining eleven are overbought. These ETFs have made a fairly large push towards or deeper into overbought in the past week as seen through the long tails in our Trend Analyzer tool. Some, like the Core S&P Mid Cap (IJH) and S&P Mid Cap 400 (MDY), have even made it back to overbought after sitting below their 50-DMAs at this time last week. These two have also seen the strongest gains, rising more than 3.5%. While most of the small and mid caps still have some room to run until overbought levels are more of a concern, other ETFs are approaching extreme overbought territory. On the other hand, the Micro-Cap (IWC) has significantly lagged in the past week and is just barely above its 50-DMA. The Core S&P Small Cap (IJR) is in the same boat. Even though it has rallied more than 3% over the last week, it only sits 0.64% above its 50-DMA.
Taking a look at sector ETFs, it is broadly the same story. For the most part, things have moved towards overbought as eight of the eleven sectors sit in this range. The Consumer Discretionary Sector (XLY) has moved into extreme overbought territory after a large gap up yesterday. Meanwhile, Financials (XLF) have staged a turnaround after substantial declines in recent weeks. Yesterday’s rally of 2.45% not only helped to lift the sector out of oversold levels, but it also brought the sector back above its 50-DMA. XLF actually doesn’t hold the crown for the sector with the largest gains over the past five days. That title belongs to Industrials which have surged 4.73%. Conversely, Utilities (XLU), which had been one of the better sectors on the year up until a couple of weeks ago, has continued to fall out of favor. In the past week, XLU has exited overbought levels and is now in neutral after falling 1.4%. It is the only sector to be lower than where it stood one week ago.