Three Sectors on watch

Consumer Staples, Utilities and Real Estate are showing similar consolidation pattern on daily charts.

Relative Strength and Momentum

XLU and XLRE have crossed above 10 DMA of relative comparison to S&P 500, while XLP is about to cross the same. XLP is above 61.8% while XLU and XLRE are just below 61.8% retracement of last major swing. RSI for all three sectors is in bullish zone around 60. MACD has given a positive cross over in all three sectors and in positive zone above zero in XLP and XLU.

Breadth

Short Term (% stocks >20 MA), Medium Term (% stocks >50 MA) is bullish for all three sectors. XLU and XLP have good Long Term breadth (% stocks >200 MA). XLRE is at 26%.

However 200 day moving average is a major overhead resistance zone.

Some more sideways movement with formation of right shoulder will be a possible completion of inverted head and shoulder continuation pattern.

Breakout and restest of this pattern along with strong close above 61.8% and a break of 200 DMA will be bullish for all three sectors.

XLP – Consumer Staples