Below we highlight our trading range charts for the S&P 500 and its ten sectors. We provide these charts along with a number of other sector indicators to Bespoke Premium members on a weekly basis in our Sector Snapshot (click here for example). In or below the green shading is considered oversold, while in or above the red shading is considered overbought. As shown, the gains over the last week or so have barely put a dent in oversold readings for many sectors. The S&P 500 is still in a downtrend from its October highs and well below its 50-day moving average.
With strong relative strength since the start of the year, Financials and Consumer Discretionary are actually two of just three sectors that aren't oversold at the moment (along with Materials). Unfortunately, all sectors are currently range bound or in downtrends, and we would therefore advise short-term traders to wait for more oversold readings or a break of the downtrends before becoming too aggressive. That being said -- long-term investors that have been waiting to find entry points for certain sectors or stocks on oversold pullbacks should not feel bad about working into positions at these levels.
Want more analysis from Bespoke? Become a Bespoke Premium member today.