Power Sector Review

February 14, 2022

From a sector perspective it can look better than the general markets depending on where you are focused, but even then there are landminds around many turns. Energy has been the most unscathed, but even in Financials and Consumer Staples we have seen well known names take a big hit on any negatively interpreted news. Growth related sectors and subsectors continue to be the most volatile as you would expect during a sellers market.

Chart Highlights

The equal weight sectors continue to be defensive with Energy and Materials flying to inflation flag high as the run out front. Financials close behind even with the tepid move this week.  Materials was led by Precious and Industrial Metals,  Chemicals and Basic Materials weren’t impressive. Finally Consumer Staples showed a bit more participation which was needed. The good part is it is helping the sector shape up, the bad part is it might not bode well for the markets as a whole if that defensive play moves back up in RS.  It is nice to see Communication Services continuing to climb after bottoming our a few weeks ago. It is notable that most of the sectors are green here versus what we saw on the market weighted ETFs. This in itself shows some broadening of participation this week even while the sellers continue to press.

Short term breadth readings remain mixe; pointing out where we have seen strength this week and which areas continue to struggle. Not all that much exciting outside of Energy and Metals on this view.

Another view that we will look at is the prominent RSI stats we look at on the charts including the Price, Middle MA Band, RSI, 9sma of RSI and CFG. How these align can give us a good idea where the charts are comparatively.  The  green highlights in the 1st column are all the indexes that closed above the middle MA Band for a simple 1st glance approach to price health. Interesting to see all the leaders, including ones like Hotels Restaurants & Leisure and even Aerospace & Defense

IIn the video I jumped quickly into the subsectors, but the two sorts I looked closer at this week were on raw performance as you see in this table.  Metals were big with Oil & Gas Consumable Fuels followed by some of the other subsectors we just mentioned in the RSI Quickview.

Sorting by RS Movers misses som eof the top ranked subsectors, but can also help point you to the next set of potential leaders. A lot of the same names on here as the top performers, but also a group of potential up and comers with lower current RS readings like Real Estate Service, Medical Equipment Devices & Supplies

The video will take you through the top performing equal weight sectors and subsectors on our 4 pillars of relative strength. 

As always, I hope this helps!