For Turnaround Tuesday, let’s re-examine the Retail Sector ETF (XRT), which we have tracked all year.
Since February 2024, the Retail Sector (XRT) has been in a massive consolidation.
While the XRT ETF recently looked poised for a breakout and a weekly close over $80, the disappointing news is that it has yet to happen.
We are super focused on this stock market ETF as not only did XRT fail to close above the 10-month consolidation, but it also impacted the rest of the stock market ETFs we follow.
The Russell 2000 ETF (IWM) failed to make new all-time highs.
The Transportation sector (IYT) reversed from its new all-time highs.
These are 3 ‘inside sectors” of the market and the US economy. And a very good “tell” on just how effective the market feels new policies will be.
Although looking at present, geopolitics and high interest rates are not helping confidence either.
XRT is our “go-to” as even after Walmart reported excellent earnings, XRT is made up of both consumer staples and discretionary, which means it is a fair representation of consumer habits in the US.
However, was that it?
Will the Retail Sector (XRT) test the low of the range, or make another valiant attempt to clear above the persistent price range?
There are 2 charts featured. The daily and weekly timeframes.
The Daily chart shows one close over the key $80 area without a second or even another day confirmation.
At this point we can call that a fake out and not a true breakout. For now, XRT must hold the gap from the day after the election, which it did today.
Then, XRT must rally back over 79 and close there.
If XRT fails to hold the gap, there is a good chance the price drops back to the 50-DMA (blue).
The weekly chart is even more important. Should XRT get a new high weekly close over 79.16, that would be better confirmation of a further rally likely.
Twitter: @marketminute
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
