The Industrial Select Sector SPDR ETF ( XLI) rallied strongly in June and could be poised to make higher highs. Let's review the charts and indicators and map out a strategy for this sector fund, which I discussed back in April for my piece: " A Sustainable Bull Market Is Lifting Off."
In the daily bar chart of XLI, below, I can see that share prices made a sideways consolidation pattern from November through May before starting an uptrend in June. The shares are now trading above the rising 50-day moving average line and above the rising 200-day line.
The On-Balance-Volume (OBV) line has moved sideways since the beginning of the year. The OBV line is close to breaking its February high. The Moving Average Convergence Divergence (MACD) oscillator is bullish but needs to break above its November zenith.
In the weekly Japanese candlestick chart of XLI, below, I can see a high-level base pattern that is close to breaking out over the 2021 highs. The shares trade above the rising 40-week moving average line.
The weekly OBV line has been slowly firming since October. The MACD oscillator is in a bullish alignment above the zero line.
In this monthly Japanese candlestick chart of the XLI, below, I can see an enduring uptrend from 2009.
In this daily Point and Figure chart of XLI, below, I can see an upside price target in the $130 area.
In this weekly Point and Figure chart of XLI, below, I used a five-box reversal filter, which is projecting a price target in the $156 area.
Bottom-line strategy: The XLI should be one of your overweight sectors. Traders could go long the XLI in the $106-$104 area. Risk to $101. The $130 area is my first price target.
