SPDR sectors closed green on Thursday.
The NYSE found support, near previous ratios from the 20ema. Mean reversion in the blue examples took place shortly thereafter. The caveat is the moving average is descending and price is below. Best case scenario is a move back to the 20ema that does not stop. Stochastic is in the green zone. HiLo in the bottom panel appears ready to turn up soon.
Breadth improved slightly, as the histogram indicates. The indicator is back above the zero line, as we saw after the previous dip. Look left, blue arrow under histogram. With the 200ma near flat we play upper and lower Bollinger bands. The upper band is the target if SPDR sectors can print a follow through bullish day.
Consumer discretionary stocks improved dramatically on Thursday. The sector illustrates the effect, bouncing at the 200ma, where many institutions start scaling back into stocks. A continuation bullish move must ensue to be valid. A move back above the descending 9/20ema would be a huge plus for bulls.
Many of the stocks in this sector show buying activity. RSI is is turning higher from oversold territory. Stochastic and MACD are supportive. The company reported on 7/28/16, exceeding analysts estimates by 12%.
Check the charts in the list below and consider their competitors. Check IBD rankings if you have a subscription. Look for oversold conditions, met with increasing volume, as a sure sign institutions are interested.
With the dip in futures, we need to see a follow through day.
Happy Trading – Vinny
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