Has The Time Come For The Materials Sector?

The Materials sector ETF, XLB, has retreated to the 200-week moving average. On the daily chart, it looks like it is consolidating. The weekly stochastics indicator is about to produce a ‘buy' signal. Is this a good time to consider this beaten-down sector? If the economy is improving, and Washington keeps telling us it is, the materials sector should be one of the first sectors to rebound. After all, they supply the materials for so many other sectors to provide their products and services.

Ah, but once again, Seasonal Analysis provides insight that isn't available in the chart patterns or fundamentals of the component stocks. The seasonal chart shows that over the next 3 weeks, XLB has lost an average 3.4%, with losses in a high 13 out of 16 years (81%):

It may be a good trade to pick up some XLB shares under these circumstances. But the seasonal pattern shows the timing isn't quite right. Wait a month or two and then reconsider the trade. You will then have a positive seasonal pattern to provide a tailwind on the trade.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2015 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com.

The content on any of Market Tamer websites, products, or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options, and other securities involve risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities are not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options (http://www.optionsclearing.com/publications/risks/riskstoc.pdf). The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.

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