BHT identifies meaningful trends and important supply and demand levels in the financial markets. An understanding of these dynamics will add Alpha to any investment strategy. The following are important factors to consider in the Energy, Industrials, and Materials Sectors.
Oil – Oil has been consolidating between $54 and $51 since December. $51 is important support because it was clearly defined resistance three times over the course of a year before finally being broken in December. It failed and had a significant selloff from this level in October of 2015, in early June, and again in October of 2016.
Copper – Copper may have broken resistance around $270 and now this level needs to be watched because it may become important support. This is where it ran into resistance in November and early December and again in January.
XLE – S&P 500 Energy Sector ETF – The XLEs have been trending lower after hitting resistance around $76 in December. There was resistance around $76 because it was the same level that the XLEs found support at in late 2014 and early 2015. They are now testing support around $71-72.
XLI – S&P 500 Industrials Sector ETF – The XLIs are trading at all-time highs. Short-term, there may be support around $64 because this was the top of the range from late November through early February.
XLB – S&P 500 Materials Sector ETF – The XLBs continue to consolidate around the $52 level. As expected there is resistance at this level because it was the all-time high in early 2015.