ETF Trends, Patterns and Setups – Cyclical ETFs Lead, Tech ETFs Pullback, High-Flyers Correct Hard (Premium)

February is turning into a big month for cyclically oriented ETFs. These include: Copper Miners ETF (COPX), Metals & Mining SPDR (XME), DB Base Metals ETF (DBB), Oil & Gas Equipment & Services ETF (XES), Oil & Gas Exploration & Production ETF (XOP), Airline ETF (JETS), Transports ETF (IYT), Industrials SPDR (XLI), Regional Bank ETF (KRE), S&P SmallCap 600 SPDR (IJR), S&P MidCap 400 SPDR (MDY) and Semiconductor ETF (SOXX). The lists below shows ETFs with big gains over the last 17 trading days (February).

Gains exceeding 20%: GBTC, COPX, FCG, XOP, XLE, MJ, YOLO, URA, JETS, KRE, XME, REMX, KBE, XES

Gains exceeding 15%: SLX, DBE, XLF, DBB

Gains exceeding 10%: ITA, IPAY, IYT, XAR, KIE, UFO, REM, IJR, MOO, ARKF, IWM, SOXX, SMH, AMLP, MDY, XLI

ETFs with massive gains and new highs in February are clearly in uptrends and bullish overall. There are, however, no active setups, such as a consolidation within an uptrend or oversold RSI. This means they are in the trend-monitoring phase. Now is the time to establish your trading/investing timeframe (short, medium, long) and consider an exit strategy (profit target, trailing stop, long-term trend reversal). Otherwise, it is simply time to wait for the next setup.

The next setups are materializing in the lagging ETFs. These are the high-flying ETFs and tech-related ETFs that corrected over the last few weeks. Many have RSI values in the oversold zone and some have falling flag patterns working. My only concern is that many of these ETFs have not experienced a multi-week correction in some time and we could see such a correction unfold, and last into March.

Strong Uptrends, New High, RSI above 80

DBA, DBE, DBB

Flag Breakout early February, Surge to New Highs

XLF, KRE

Flag Breakout early February, Surge to New Highs

USO, DBE, XLE, XES, XOP, FCG

Flag Breakout early February, Surge to New Highs

XME

Breakout to New Highs

XLI

You can learn more about ATR Trailing stops in this post,
which includes a video and charting option for everyone.

Zigzag Higher since early November, New High this Week

RSP, MDY, IJR

Flag Breakout early February, Short of New High

XLB, AMLP

Strong Uptrend, Modest Pullback or Stall

SOXX, IPAY, REMX

Zigzag Higher since early November, Short of New High

SPY, IWM, XLC, XAR, HYG

You can learn more about ATR Trailing stops in this post,
which includes a video and charting option for everyone.

Zigzag Higher since November, February Pullback

QQQ, XLK, XLY, IGV, FDN

The tech-related ETFs and high flyers are experiencing the deepest pullbacks. Overall, these ETFs had some of the biggest runs from late March to February and were ripe for a rest. As noted in this weekend post, the Nasdaq 100 percentage of stocks above the 50-day SMA showed a lot less participation on the latest move higher. This indicator fell to 55% this week and a break below the late January lows (49%) would put the Nasdaq 100 in corrective mode. I will feature this chart tomorrow.

Sharp Advance Nov-Jan, Sharp February Pullback

SKYY, HACK, FINX, IBB, XBI

Uptrend, Sharp Pullback

PBW, TAN

Consolidation Breakout, Grinding Follow Through

ITB (SLV was featured above)

Grinding Higher with Consolidations along the Way

XLV, IHI, IHF, PHO

Wedge Breakout in mid January, Lagging Uptrend

REZ

Breakout from Long Consolidation

XLRE

ETFs from here are lagging over the last few months or in downtrends. Note the gold and Treasury bonds are the weakest of all right now.

Falling Channel in 2021 and Lagging: XLP

Lagging since December, StochClose turned Bearish: XLU

Downtrend: TLT, AGG, LQD, UUP, GLD, GDX

Thanks for tuning in and have a great day!

-Arthur Hill, CMT
Choose a Strategy, Develop a Plan and Follow a Process

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