This is the final slug of charts that I examine almost daily. These have been the safety and defensive names that have provided such great performance over the last 3 or 4 years. Recently, several of these "safe-trades" have been beat up as some memory of valuation and risk management must have taken hold for a brief month or two. I'm not sure if reality or sanity will continue to persist, but if it does, the utility space along with some consumer staples should be ones to sell.
While XLF (big banks) looks a smidge weaker in the last month, it is still higher than 3 months ago. In the last 10 months, XLF seems to get down to the mid-line of the rising channel and simply stair-step higher. The recent headwinds seem to be nothing more than an opportunity to see XLF move to $20 where it should be a good place to add.
KRE does look nice and very similar to XLF. The price action seems to be in uncharted territory here, I do think that like XLF we could see a slight pullback where it should be a buy. I actually like the regional banks much more than the larger money-center banks as they are not dependent on the mortgage business.
Hum. The risk manager in me looks at this chart and thinks that the $19.75 level could be more than just a little resistance for FITB. If you haven't sold already, a thrust higher may be the opportunity to get out before a fall.
PNC has logged an impressive run and was swiftly knocked back as it tried to exceed $78.00. The $76 seems to be good support. Below that, $72 may be the next place the stock tries to defend.
$47 seems like a nice place to put a stop on MRK if you are a trader and don't want to give up big gains. If you are looking for a longer term investment the perspective simply could be that it is still within a huge rising channel and a bounce off the lower line could bring great things. I'm willing to be patient with this one, but am still wary of a potential double top here.
Pfizer too looks to have fallen a bit, but isn't over bought and looks actually to be building a very nice base to move higher. I'm sticking with this one.
Call it sector rotation, call it a valuation move, call it higher interest rates. No matter what you call it, XLU has been a fantastic longer term play for me, yet I punted it. While one could argue that in a risk-off fall, XLU will outpace other sectors in relative terms, I think the upward momentum baton that XLU has carried has been passed on to the financials, energy, and industrials (perhaps even cyclicals!).
PFF is one of those preferred stock etfs that looks to capitalize on rising interest rates. Unfortunately the mixed-bag of holdings in PFF cause it to be subject to significant risk as it holds Reits and other financial firms that may suffer if interest rates rise quickly. I think PFF may be a punt in favor of cyclicals we've discussed in other posts.
Does this thing ever go down? It's funny that even though we are not in a recession, typical recession favored type investments are simply kicking ass. The general playbook in a recession is to buy utilities, healthcare, defense, and consumer staples. Well somehow no one ever got the memo that we are not still in a recession as XLP continues to fire higher. Just as a matter of good financial and portfolio management you've got to sell XLP, even though it may go higher.
I really started looking at IXN and buying it about six months ago. I actually really liked the chart of MSFT, but didn't want to just buy that name. IXN looks really, really nice here even though MSFT doesn't. Here is another view of the same chart. Let me know your thoughts as this is actually one of my favorites.
Alright, don't laugh at this one. This is the social media etf. This is actually one of the few pure-play social media internet efts out there, and better ones in my opinion (if you don't mind some of the garbage in it!). I first came to know SOCL when they announced that they would actually add the FB IPO to their etf, which made me want to short the heck out of them. (Yes, I still think FB is a zero despite its recent big move). Despite my thoughts on FB, SOCL contains other social media firms I actually respect like LNKD and YELP that actually have a usable and money making function. It does contain loser stocks like Groupon too, so it isn't without its flaws. Anyway, I put this up to highlight just how fired up these types of investments have been and remind you to party like it's 1999!
I hope you've enjoyed the round up. Let me know if you have questions and if you think I should begin looking at some other good set ups.