XLF Technical Analysis

Financial ETF (XLF (Technical Analysis)

Financial Select Sector SPDR

 

The ETF “Financial Sector SPDR,” that uses the symbol “XLF,” has been influenced by the stock market this week. Its stock price stands at $16.54. As we learn in MSN Money Snapshot they write this about the Fund: “The investment seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Financial Select
Sector Index. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. This fund has adopted a policy that requires it to provide shareholders with at least 60 days notice prior to any significant material change in its policy or its underlying index. It is non-diversified.

 

As a long term investment, XLF appears to be very healthy. From this weekly chart we can see the simple formation of a past bottom forming and now we have been on a steady climb for a whole year. There are no signs in any off the indicators of a slow down either.

 

Presently we have been on a stead climb since mid February, a nice healthy climb. We have yet to show a slow down. And if the pattern continues, we may not. But if and when we do rest a bit we need to identify support & resistance.

 

Support- the first minor area of support we find might be around 16.2. Not real strong, but it may redefine itself. But if we get a pullback, the first area we run into would be about 15.35. We can identify no less than 5 touches at this level since September of 2009. If the stock rests or consolidates, look for the first challenge to be 15.25.

 

Resistance- It is presently at a nice level of resistance. If we look at the weekly chart we can see that. If it pushes through here, we are looking at the next significant level to be 18.51.  We can look higher and find some more significant levels at about 20 but we are a little premature looking at them.

 

Outlook- We have not yet identified a slowdown in this trend upward so we will look for it to push through the level it is presently at. If it does (and we expect it to) we are going to watch it push up another 15 % before it is challenged again.