Sector Rotation Analysis: A Practical Tutorial Using TradingView Overview Sector rotation is an investment strategy that involves reallocating capital among different sectors of the economy to align with their performance during various phases of the economic cycle. While academic studies have shown that sector rotation does not consistently outperform the market after accounting for transaction costs, it remains a popular framework for portfolio management. This tutorial provides a step-by-step guide to analyzing sector rotation and identifying leading and lagging sectors using TradingView . https://www.tradingview.com/x/UcukbrGQ/ Understanding Sector Rotation and Economic Cycles The economy moves through distinct phases, and each phase tends to favor specific sectors: 1. Expansion : Rapid economic growth with rising consumer confidence. - Leading Sectors: Technology AMEX:XLK , Consumer Discretionary AMEX:XLY , Industrials AMEX:XLI 2. Peak : Growth slows, and inflation may rise. - Leading Sectors: Energy AMEX:XLE , Materials AMEX:XLB 3. Contraction : Economic activity declines, and unemployment rises. - Leading Sectors: Utilities AMEX:XLU , Healthcare AMEX:XLV , Consumer Staples AMEX:XLP 4. Trough : The economy begins recovering from a recession. - Leading Sectors: Financials AMEX:XLF , Real Estate AMEX:XLRE https://www.tradingview.com/x/FiLOj2Zw/ Step 1: Use TradingView to Monitor Economic Indicators Economic indicators provide context for sector performance: GDP Growth : Signals expansion or contraction. Interest Rates : Rising rates favor Financials; falling rates benefit Real Estate. Inflation : High inflation supports Energy and Materials. https://www.tradingview.com/x/BqOy5j30/ Step 2: Analyze Sector Performance Using Relative Strength Relative Strength RS compares a sector's performance against a benchmark index like the SP:SPX This helps identify whether a sector is leading or lagging. How to Calculate RS in TradingView Open a chart for a sector TSXV:ETF , such as AMEX:XLK Technology. Add SP:SPX as a comparison symbol by clicking the Compare ➕ button. https://www.tradingview.com/x/yREXMrBv/ Analyze the RS line: - If RS trends upward, the sector is outperforming. - If RS trends downward, the sector is underperforming. Using Indicators e.g.: You may add the Sector Relative Strength indicator from TradingView’s public library. This tool ranks multiple sectors by their relative strength against SP:SPX https://www.tradingview.com/x/KEZOeFRa/ Additionally, you can use the RS Rating indicator by @Fred6724, which calculates the Relative Strength Rating (1 to 99) of a stock or sector based on its 12-month performance compared to others in a selected index. https://www.tradingview.com/x/k6BKIAhN/ Example In early 2021, during economic recovery, AMEX:XLK 's RS rose above SP:SPX , signaling Technology was leading. Step 3: Validate Sector Trends with Technical Indicators Technical indicators can confirm sector momentum and provide entry/exit signals: Moving Averages Use 50-day and 200-day Simple Moving Averages SMA. If a sector TSXV:ETF trades above both SMAs, it indicates bullish momentum. Relative Strength Index RSI RSI > 70 suggests overbought conditions;
XRP is currently trading around 2.42 and has recently broken out of a descending channel formation. This breakout suggests a potential shift in momentum from bearish to bullish. The price is now consolidating just above the trendline, indicating that buyers are stepping in to support this level. The descending channel was characterized by consistent lower highs and lower lows. However, the breakout above the upper boundary of the channel signals that the selling pressure may be weakening. If the price holds above this level, further upside movement is expected. A key support level is now established around 2.40 to 2.42, which was previously resistance. If the price stays above this zone, the bullish case strengthens. Immediate resistance is found around 2.50 to 2.55, where price has faced rejection before. A decisive break above this area would confirm further upside movement. Volume analysis shows that trading activity is still relatively low, which is common during consolidation phases. A strong increase in volume above 2.45 would provide additional confirmation of bullish strength. Monitoring this volume breakout is essential for validating the move. Momentum indicators such as the RSI should also be observed. If RSI moves above 55 to 60, it would indicate growing buying pressure. A hidden bullish divergence, if present, would add further confidence to the breakout. The first target for this breakout is 2.50 to 2.55, where resistance is expected. If price gains strength beyond this zone, the second target would be 2.65 to 2.70. These levels mark potential areas where price could face selling pressure or profit-taking. To manage risk, a stop-loss should be placed below 2.38 to 2.40 to avoid potential fakeouts. If price falls back below this support, the breakout could be invalidated, leading to a potential retest of lower levels. XRP is at a crucial turning point, with signs of bullish momentum building. If the price sustains above the breakout zone and breaks through 2.45 to 2.48 with strong volume, a larger upward move could follow. Traders should remain cautious but keep an eye on price action for confirmation of the next trend direction.
Here is a pair that we looked at many, many times last year, all of these times on the SHORT side and many of these looking were successful. I met a lot of people through this pair, we did a lot of trading and we did great. Things change. I no longer see any bearish potential on this chart. Kaspa (KASUSDT) grew an incredible ~1600% between 2023 and 2024, and the correction/consolidation phase was weak/strong. Weak in the sense that Kaspa remained pretty strong. Strong in the sense that prices remained pretty high compared to the starting point. In short, this is a strong project based on the chart. You will have to consider the fundamentals for yourself as in this channel we concern ourselves only with technical analysis. So things change and Kaspa hit its lowest price last week since November 2023. The weekly close happened right above the 0.618 Fib. retracement level for the entire bullish cycle on this chart. It wicked below but it closed above. Why is this important as in an important signal? Because the bullish cycle lasted 434 days. Such a strong cycle. Having a strong correction and this dynamic showing up can mean that the correction reached its end. But this is not without risk. 0.618 Fib. sits at 0.08727. We are using the weekly timeframe. The last major low sits at 0.07600. We can say that as long as KASUSDT trades above this level, we have bullish potential and this pair, together with the rest of the market, can grow. If the action moves below, we are not right or wrong, the bullish potential becomes invalidated and the charts dynamics change. It has bullish potential but it is early. The potential is based on the fact that the market is starting to change but it is still early. We are going up long-term regardless of the short-term. Let's sum it all up: Short-term, we are aiming higher but there can be some shakeouts based on the chart. Mid-term and long-term, we are going up. Do you agree? Yes! Follow me. Thanks a lot for your continued support. Namaste.
2/10/25 :: VROCKSTAR :: NASDAQ:FLNC Doing some work AH -38%... - i need to get up to speed here, so any comments appreciated - but given the net cash balance... a -40% move basically translates to reducing 1 bn in implied enterprise value e.g. -60%. - so i ask "is the result/ down guidance worth -60% on implied valuation" - this is one of those situations where i think all else equal the chart doesn't help - i'd like to get more fundamental basis here... but i'll take the "over" at the stock near $8. don't think there's much more than say 5-10% downside here in the ST whereas the upside might be 2x this. - given my being new to this name, i'm keeping the trade (very) small and it's more for sport trading px action nothing else V
Gold did not retrace and did not give us any buying opportunity for the past day. Although I could trade the breakout, I felt it was too risky. It's always good to look at the daily close for better entry. Daily candle indeed broke 2887 resistance and reached another ATH. Gold is no doubt in strong bullish environment driven by fundamentals. I will look for buying opportunity at the support turned from previous resistance at 2887. 1st target 2922, final target 2946.
Over the past few months, Ethereum has been a disappointment for bulls, struggling to maintain momentum. Despite Bitcoin testing its all-time highs, ETHUSD has consistently rolled back from the 4K resistance, forming lower highs along the way. Bitcoin’s recent drop to 90K triggered a sharp decline in ETH, pushing it down to the critical 2.1K support zone. While the price is currently rebounding, I believe this recovery will likely turn into another failed rally. My bias remains bearish on ETH/USD as long as the price stays below 3K. I’m looking to sell rallies into that zone. Only a sustained breakout above $3,200 with strong buying pressure would invalidate this bearish outlook.
Good Evening and I hope you are well. comment: What did we learn today? Market is digesting any newsbombs quicker and quicker but we still have deep pull-backs. Today the volume was atrocious so I don’t think the bullish daily bar is all that important. If bulls get follow-through above 22000 tomorrow, I am clearly wrong and we test 22100 next and afterwards there is no more resistance until 22400. current market cycle: trading range key levels: 21300 - 22000 bull case: Bulls only objective is to print higher highs above 21967. Until they achieve that, market is in a triangle and bulls are not favored when buying the highs. They have prevented another much deeper sell-off below 21400 but given the low volume today, I don’t think many will be thrilled to buy above 21800 tomorrow. Above 21967 we go for 22100 next and after that is no more resistance until 21400. Invalidation is below 21400. bear case: Bears were fine with the gap down and did not fight the buying today. I do think tomorrow will be very different. Every bear who sold above 21800 made money since end of December. The price action is not bullish enough to make more bears doubt that we will strongly break above this triangle. First target is today’s open, 21760. Then we have the midpoint of this triangle around 21700, followed by last weeks close 21588. Below that is Globex low 21453 and then 21200. Invalidation is above 21970. short term: Bearish. Stop for shorts is 22110. If I’m wrong here, so be it but structure is neutral and odds favor the bears to keep making lower highs now and we test back down to at least the midpoint of this triangle around 21500. medium-long term - Update from 2024-01-27: High’s are most likely in. Any short with stop 22200 is good. I’d like to see 20000 over the next 2-3 weeks. current swing trade: None trade of the day: Buying the big Globex gap down and then market did not print one single bearish signal until bar 45 and that was the first, so you can not sell it.
Ethereum is currently bouncing from a key ascending trendline support, which has held strong in previous market corrections. This trendline has historically acted as a major reversal point. ETH has rebounded from the $2,300–$2,400 range, aligning with the long-term trendline support. If ETH sustains this bounce, the next major resistance lies around $3,100–$3,200. A breakout beyond this could open the path towards $4,000. We might observe some consolidation above the trendline before a potential breakout. The price action suggests bullish momentum, but a daily close below the trendline could invalidate this outlook.
The current direction of Btc is in consolidation phase or the resting phase, we will have a directional move when it breaks either of the swing high or the swing low, But i'm looking at taking a short trade on it within the range. Lets see what price movement will do.
Miners overall have been beaten down since BTC put in a midterm top. CLSK has got all the makings of an easy to manage risk position trade. Clear M-shape harmonic structure with accumulation happening at a very real level looking left. Trade safely. < 3