ETFs to watch
It’s clear from the chart that XLRE – the Real Estate Select Sector SPDR Fund - has been in an uptrend since January.
In fact, XLRE touched its ascending 50-day exponential moving average eight times – the orange circles - since April and every time it bounced up and resumed its bullish trend.
XLRE is currently moving up after it touched its 50-day exponential moving average and the lower Bollinger Band for the last time.
The next obstacle to the uptrend of XLRE is the blue resistance line just below 40.
The MACD Histogram of XLRE has been moving up in tandem with the bullish momentum of the Fund.
Just as important, XLRE’s Relative Strength is also moving up and has crossed above its 20-day exponential moving average.
The most important observation from the chart is that the long-term trend of SPLV – the Invesco S&P 500 Low Volatility ETF - is bullish.
In fact, since February, only once did price move below its ascending 50-day exponential moving average. We show this with the blue circle. On other five occasions price touched its 50-day exponential moving average and bounced up immediately.
The last time price touched this moving average and the lower Bollinger Band, it bounced up with two big candlesticks that brought price above its 10- and 20-day exponential moving average.
The MACD Histogram has just turned up toward zero as momentum started building up.
Finally, SPLV’s Relative Strength has been moving up since mid-September and of course has moved above its 20-day exponential moving average as this low-volatility ETF is outperforming our benchmark the SPY.
Since March XLP – Consumer Staples Select Sector SPDR Fund - touched or moved below its 50-day exponential moving average only four times. See the blue circles in the chart.
After the last time XLP touched its 50-day exponential moving average and the lower Bollinger Band, price bounced up and has already moved above its 10- and 20-day exponential moving average. In fact price is close the upper Bollinger Band. The bullish Harami pattern and the big bullish candlestick of the last season indicate the bulls’ strength to resume the long-term uptrend.
Although MACD is still below its signal line, it has turned up and is close to cross above its signal line, provided of course the bullish momentum stays intact.
As for XLP’s Relative Strength, it has already turned up and has crossed above its 20-day exponential moving average, as XLP outperforms SPY, which is our benchmark.