• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock The Best Five Sectors, #13
Stock

The Best Five Sectors, #13

by March 31, 2025
by March 31, 2025 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Financials take the lead.

No changes in the composition of the top 5 this week, and only one change of position within the top 5.

Financials (XLF) leapfrogged to the number one position, sending Communication Services (XLC) to the #3 position. Energy (XLE) remains #2 while Utilities (XLU) and Healthcare (XLV) remain in positions #4 and #5.

Let’s examine the details and see what the Relative Rotation Graphs tell us about the current market dynamics.

Sector Lineup

(3) Financials – (XLF)*(2) Energy – (XLE)(1) Communication Services – (XLC)*(4) Utilities – (XLU)(5) Healthcare – (XLV)(6) Industrials – (XLI)(7) Consumer Staples – (XLP)(8) Real-Estate – (XLRE)(9) Consumer Discretionary – (XLY)(10) Materials – (XLB)(11) Technology – (XLK)

Weekly RRG: A Tale of Three Leaders

The weekly Relative Rotation Graph now shows three sectors firmly planted inside the leading quadrant.

XLF has rotated back into leadership after a brief sojourn, while Communication Services (XLC) maintains its strong position. Energy (XLE) is the latest entrant, crossing over into leading with a positive RRG heading—a trajectory that bodes well for continued outperformance.

Utilities (XLU) and Health Care (XLV)—our fourth and fifth-ranked sectors—currently reside in the improving quadrant. However, their strong RRG headings suggest they’ll likely leap into leading territory in the coming weeks. It’s worth noting that Health Care is flexing its muscles with the highest RS momentum value among all 11 sectors.

On the flip side, we’re seeing only two sectors with negative RRG headings—the same culprits as last week. Technology (XLK) is pushing further into the lagging quadrant, while Consumer Discretionary (XLY) is rapidly approaching a crossover from weakening to lagging. This persistent weakness in these typically high-flying sectors is something to keep an eye on as it coincides with general market weakness.

Daily RRG: Short-Term Shifts

Zooming in on the daily RRG, we get a more nuanced picture of short-term rotations. Financials are holding steady in the leading quadrant with a neutral heading—there has been little movement over the past week.

Energy, which boasts the highest RS ratio, is losing some momentum. However, given its elevated RS ratio, this is likely just a temporary setback.

Utilities and Health Care are showing some interesting moves on the daily chart. XLU is currently in the weakening quadrant with a negative heading, but XLV is starting to curl back up—a positive sign that aligns with its weekly chart momentum.

XLC’s daily tail is painting an intriguing picture. It’s barely inside the lagging quadrant, but its positive heading pointing towards leading suggests it may soon start supporting the positive direction we see on the weekly chart.

In the bottom half of the rankings, we see some weekly weakness confirmations. Technology is rolling over in the improving quadrant, while sectors like industrials and materials are rotating from leading to weakening, all of which aligns with their lower positions in the portfolio ranking.

Financials (XLF)

XLF has bounced off support around 47, but the price chart still looks precarious.

The relative strength picture, however, is much more encouraging. We’re seeing a clear uptrend in the raw RS line, which is pulling both RRG lines higher. Keep an eye on that 47 level as key price support.

Energy (XLE)

Energy is currently trading in a range between roughly 84-85 and 98.

The real action is in the relative strength- we’re seeing a breakout from a falling channel, which is now pulling both RRG lines above 100.

This is what’s driving XLE’s move into the leading quadrant.

Communication Services (XLC)

XLC is holding above support around 94, but only just.

A break below 93-94 could trigger more downside.

Relative strength still looks good, but the raw RS line is at the top of its rising trend channel. The high RS ratio reading gives some wiggle room, but it’s a situation to monitor closely.

Utilities (XLU)

Utilities remain stuck in a trading range, which is keeping its raw RS line range-bound as well.

It’s strong enough to keep the RRG lines rising, but we’ll need to see a relative strength breakout to push XLU into the leading quadrant.

Health Care (XLV)

Health Care is bumping up against resistance near 150 and remains range-bound.

A potential head-and-shoulders pattern is forming, but support is still a ways off around 135.

Relative strength is pushing against resistance, and with both RRG lines rising, XLV looks poised to cross into the leading quadrant soon.

Portfolio Performance Update

After last week’s hiccup, the RRG portfolio has not only erased its underperformance but actually flipped to outperformance.

As of last week, the portfolio stands at -4.86% YTD, compared to the S&P 500’s -4.96%. That’s a reversal from a 1.4% underperformance to a 10 basis point outperformance — not too shabby for a week’s work.

The market is sending plenty of mixed signals, but the sector rotation story is becoming clearer. Financials are stepping up, Energy is making moves, and the traditionally defensive sectors are showing strength. Meanwhile, Tech and Consumer Discretionary continue to lag—a trend that could have significant implications if it persists.

These rotations can shift quickly, so stay nimble and keep your eyes on the charts. The market never sleeps, and neither should your analysis.

#StayAlert –Julius

You Might Also Like
  • Week Ahead: NIFTY May See Stable Start; Likely To Remain Under Selling Pressure At Higher Levels
  • Oil the New Gold — Buy When There’s Blood in the Streets
  • Capitalizing on Riot Platforms’ Potential: A Sleeper Stock Ready to Soar?
  • DP Trading Room: This is the ONLY Sector Showing STRENGTH Right Now
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Volatility Ahead: What Investors Need to Know Right Now
next post
S&P 500 Drops Quickly to Test Key Support Amid Rising Volatility

You may also like

Small-Caps Get on Board!

October 11, 2024

What Can We Expect from Stagflation?

April 27, 2023

SMH Bulls are Skating on Thin Ice

April 23, 2023

Avoid Analysis Paralysis: Focus on the Important Trading Tools

March 14, 2023

This S&P 500 Rally is Defying the Experts – Here’s...

September 19, 2024

An Indicator to Reduce Whipsaws and Ride Trends

September 14, 2024

Market Research and Analysis – Part 2: Using Technical Indicators

March 21, 2024

DP Trading Room: Downside Exhaustion Climax

June 27, 2023

Are the Once High-Flying MAG 7 Stocks Just Mediocre Now?

February 11, 2025

S&P 500 Under Pressure, Can Strong Seasonality Save It?

November 2, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Hedge Market Volatility with These Dividend Aristocrats & Sector Leaders

      June 2, 2025
    • What’s Next for Dollar Tree, CrowdStrike, and Broadcom? Watch These Setups

      June 2, 2025
    • The Best Five Sectors, #21

      June 2, 2025
    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past This Level Crucial For Resumption Of Upmove

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,767 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,473 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,452 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,434 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,310 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,585)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Hedge Market Volatility with These Dividend Aristocrats & Sector Leaders

      June 2, 2025
    • What’s Next for Dollar Tree, CrowdStrike, and Broadcom? Watch These...

      June 2, 2025
    • The Best Five Sectors, #21

      June 2, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,585)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Earnings for 2023 Q3 Show Market...

    January 5, 2024

    Scanning for Strong Reversals via Bullish...

    May 31, 2023

    Hidden Gems: Bullish Patterns Emerging in...

    April 23, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here