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Sector Spotlight: 2 Sectors Making Strong Comebacks, Will It Last?

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Market Recap For August 1st, 2022

Almost on cue, markets pushed a hair higher to start the week, only to hit our previously cited resistance, and then pull down.

Although it is completely possible that stocks may take another stab higher, it seems that a pullback may have already started.

Yesterday’s Sector Performance

On a day of weakness, Consumer Staples outperformed.

Energy, which had been a leader, fell to the bottom.

Five-Day Sector Performance

Thanks to Energy’s fall, Discretionary is now the weekly leader.

Healthcare is in the green, but also at the bottom.

ETF Trade Watch

Energy Select Sector SPDR (XLE)

Oil failed to hold the $95 mark, and its 200-day MA, for the first time since earlier this year. That could spell trouble for the XLE. While falling energy prices are good for consumers, traders that are long energy names would want to see oil push higher, or else risk getting washed out.

Consumer Staples Select Sector SPDR (XLP)

If the market pulls back further, Consumer Staples could remain a top performer, and the provides possible bullish opportunities with the XLP. As inflation rises, consumers are looking at their spending habits. As consumers move to discount retailers and buying in bulk to save money, they are pushing investors and traders to make trades based on that information. Names like Coca-Cola and Costco are two names that have held up XLP with their strong performance throughout the market downturn. Keep an eye on this trend.

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Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group. My Chartered Market Technician (CMT) designation substantiates me as an expert in areas such as the technical analysis of stock trends, market indicators, cycles, price patterns, Elliot Wave principles, Candlestick charting, analyzing financial trends and behaviors, portfolio strategies, and forecasting future price movements. With my straightforward approach to simple, systematic trading, students learn how to strategically assess buy signals and market entry timing, establishment and management of stop losses, and how to employ a simple and disciplined trading approach that creates profits.

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