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Breakout Sectors for next X'mas Rally (if happens...)




It all depends on Trump-Xi decisions in the next weeks. Let's check some popular sectors with its shares near to make a breakout:

1. Semiconductors ETF SOXX, $234.74


Since May, the popular Semiconductors sector (really a subsector, not properly a GICS sector), followed by the ETF SOXX, was ranging forming an ascending triangle with a strong resistance that finally breakouts last week at $221.40. And was a successful breakout as you verify its daily chart, with its three phases clearly distinguish: action, reaction, and resolution, all of them with its volume requirements. Technically, its shares may begin to rise, despite being in all-time-highs, as all technicals signals are very bullish now. Shares are above the three main SMA averages, above the Ichimoku cloud and its pivot line at $219.26.
But be careful with two details: as usual, the Trade War developments (a bad or no agreement will be devastating for Wall Street), and next Qualcomm QCOM and Nvidia NVDA earnings, two giants of this sector that could reverse the chart if its reports don't satisfy investors. I wait for a little pullback, due the stock is overbought now, and then enter long.




2. Biotechnology sector XBI, $83.14


The biotechs, follow by the popular ETF XBI, seems to be a great bet for these months. Now trading at the same levels of November 2018. Since April its shares were trading in a bearish downtrend channel as shown. Finally, last week overcome the key SMA200 average, and the upper channel line, but needs to retest it or could be a false breakout. On my radar: there is a long bullish road to go here for this industry.





3. Russell 2000 Index ETF IWM, $159.15


Not properly a sector, but an index, the small caps stocks are followed by the Russell 2000 index and its  ETF IWM, and of course the popular, and very volatile, ETFs TNA and TZA. Technically, its daily chart shows the same patterns as the XBI chart above: a bearish downtrend channel, with a recent breakout of the upper channel that needs to be confirmed in this days. Also, this ETF is on my radar, waiting for a long trade. If Trump and Xi decide to finish their war, the sky is the limit for all the markets and especially for this index.