lt has been awhile since we last posted our sector trading range charts, so below we provide an update. For each sector below, the red zone represents between one and two standard deviations above the 50-day moving average. The green zone represents between one and two standard deviations below the 50-day. Moves into or above the red zone are considered overbought, while moves into or below the green zone are considered oversold.
As shown, the S&P 500 is currently trading right at the top of the red zone, meaning overbought levels are present. We've been trading in the red zone for a couple of weeks now, but we haven't quite moved above it. Any move above the red zone now will mean the index has broken above the top end of its upward sloping trend channel.
The Financial sector is the most overbought of the ten S&P 500 sectors at the moment. Every sector except for Energy and Utilities is currently trading in overbought territory
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Posted by: Rajasthan Heritage Tours | August 24, 2009 at 12:44 AM