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Take-Aways:

For many sectors, key support levels have held, and rebounds have recaptured the 50-day moving averages. At the same time, many sectors remain below their declining 200-day moving averages. The net effect is that trends have become neutral across the main sectors of the equity market. Discretionary, Financials, and Industrials have seen the best relative improvements.

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Visiting the Sector Relatives

Information Technology

The Technology sector is testing the 50-day moving average from below while remaining below the declining 200-day moving average. The trend is now neutral. More aggressive investors can use the June lows as a level for risk management. More conservative investors may consider waiting until the 200-day moving average is regained before becoming more bullish.

Relative to the S&P 500

The relative trend remains the 50-day moving average as it trades below price-based resistance. Breaking above these levels would put Tech in a leadership position. An undercut of the June lows would solidify the group’s position as an underperformer.

High Beta / Low Volatility chart for March 25th research.

Consumer Discretionary

The Consumer Discretionary sector has held support and the 50-day moving average while trading below the declining 200-day moving average. Holding above 1,200 is key for the bull to avoid a retest of the June lows. The trend is neutral between there, and the 200-day moving average.

Relative to the S&P 500

On a relative basis, Discretionary remains in consolidation with support near the rising 50-day moving average and resistance around the February/March peaks.

Discretionary / Staples (EW) chart for March 25th research.

Communication Services

The Communication Services sector remains below price-based support and the 50-day moving average as it trades well below the declining 200-day moving average. The June lows have been hit, and a short-term rebound is now unfolding, but there is still a lot of work to do.  

Relative to the S&P 500

The relative trend is below the 50-day moving average, trading close to all-time lows.

Lumber / Gold chart for March 25th research.

Materials

The Materials sector has broken above the 50-day moving average and price-based resistance but remains below the declining 200-day moving average. The group is in a neutral trend above these levels.

Relative to the S&P 500

On a relative basis, the group has improved further after holding price-based support. The ratio is now above the 50-day moving average, opening the door to a run toward the highs.

Copper / Gold chart for March 25th research.

Financials

Financials have seen their trend improve to a neutral position, above support and the 50-day moving average but below the 200-day moving average.    

Relative to the S&P 500

On a relative basis, the ratio has continued to move above resistance, and the 50-day moving average as the group continues to outperform in the near term.

Small Caps / Large Caps chart for March 25th research.

Consumer Staples

Staples remains in a consolidation around the rising 50 and 200-day moving averages and in a neutral trend.

Relative to the S&P 500

The relative trend remains in a near-term consolidation but has weakened over the past week. The ratio is above support but below the 50-day moving average.

Growth vs Value (Large Cap) chart for March 25th research.

Industrials

Industrials have rallied from the 50-day moving average above the June lows, putting the group in a neutral position below the declining 200-day moving average.

Relative to the S&P 500

The relative trend continues above the 50-day moving average. There is resistance just overhead, but the series of higher lows keeps the odds in favor of a breakout.

Growth vs Value (Large Cap) chart for March 25th research.

Energy

The Energy sector remains above the 50 and 200-day moving averages. There is price-based support near 530. Above these levels, there are increased odds that the June highs will be tested.

Relative to the S&P 500

The group remains a leader with the ratio above the 50-day moving average and near the June peak.

Growth vs Value (Large Cap) chart for March 25th research.

Utilities

Utilities remain above the rising 50 and 200-day moving averages as they trade near all-time highs. Support is near the 360 level.

Relative to the S&P 500

The relative trend is above the 50-day moving average and is now testing resistance. A breakout would increase the odds of further outperformance.

Growth vs Value (Large Cap) chart for March 25th research.

Health Care

Health Care has held support and is now testing the moving averages from below. The trend here is neutral for now. 

Relative to the S&P 500

The relative trend remains below the 50-day moving average but is holding above price-based support. Regaining the 50-day would set the stage for further outperformance.

Growth vs Value (Large Cap) chart for March 25th research.

Real Estate

Real Estate has held price-based support at the pre-COVID highs and regained the 50-day moving average. Below 260, the door is open to the 210 level. Regaining the 200-day moving average would set a more bullish tone.

Relative to the S&P 500

On a relative basis, the group is in a neutral trend, oscillating around the 50-day moving average below resistance.

Growth vs Value (Large Cap) chart for March 25th research.

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