Material stocks have been stuck in a tight range since the bear market began almost two years ago. But they could be showing signs of a potential breakout.
The first pattern on today’s chart of the
XLB
Materials Select Sector SPDR ETF is Friday’s last print of $86.83. It was the highest weekly close since May 2022. That may suggest that investors are getting comfortable with loftier prices.
Second, consider the price action so far in 2024. XLB retraced half its move between late October and late December. It then consolidated above its 200-day simple moving average (SMA). A single test of that SMA on February 5 was followed by a quick rebound.
Third, the 50-day SMA had a “golden cross” above the 200-day SMA in late December. That may suggest its longer-term trend is getting more bullish.
Finally, recent weeks have seen greater economic confidence. S&P Global Ratings hiked its estimate for GDP growth and the Conference Board dropped its recession call. That could be potentially positive for materials, which are typically viewed as cyclicals.
Standardized Performances for ETF mentioned above:
Materials Select Sector SPDR ETF (XLB):
1-year: -2.88%
5-years: +54.10%
10-years: +86.67%
(As of January 31, 2024)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Important Information
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
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TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a member of NFA. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com...isclosureTSCompanies for further important information explaining what this means.
The first pattern on today’s chart of the
XLB
Materials Select Sector SPDR ETF is Friday’s last print of $86.83. It was the highest weekly close since May 2022. That may suggest that investors are getting comfortable with loftier prices. Second, consider the price action so far in 2024. XLB retraced half its move between late October and late December. It then consolidated above its 200-day simple moving average (SMA). A single test of that SMA on February 5 was followed by a quick rebound.
Third, the 50-day SMA had a “golden cross” above the 200-day SMA in late December. That may suggest its longer-term trend is getting more bullish.
Finally, recent weeks have seen greater economic confidence. S&P Global Ratings hiked its estimate for GDP growth and the Conference Board dropped its recession call. That could be potentially positive for materials, which are typically viewed as cyclicals.
Standardized Performances for ETF mentioned above:
Materials Select Sector SPDR ETF (XLB):
1-year: -2.88%
5-years: +54.10%
10-years: +86.67%
(As of January 31, 2024)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Important Information
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a futures commission merchant licensed with the Commodity Futures Trading Commission (“CFTC”). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association (“NFA”), and a number of exchanges. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services under federal and state money services business/money-transmitter and similar registrations and licenses.
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a member of NFA. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com...isclosureTSCompanies for further important information explaining what this means.