The Communication Services Select Sector SPDR Fund (XLC) has been weak and fell last Friday to a new low for the move down. Let's review the charts of this sector and see where they may be headed.
In this daily bar chart of XLC, below, we can see that prices have broken the June and July lows. Prices trade below the declining 50-day moving average line and below the bearish 200-day moving average line. The On-Balance-Volume (OBV) line has been weak the past year and is close to making a new low for the move down. The Moving Average Convergence Divergence (MACD) oscillator is bearish and below the zero line.
In this weekly Japanese candlestick chart of XLC, below, we see a bearish picture. The trend has been down since the middle of 2021. Prices are below the declining 40-week moving average line. The OBV line is bearish. The MACD oscillator is negative.
In this daily Point and Figure chart of XLC, below, we can see a potential downside price target in the $46 area.
In this second Point and Figure chart of XLC, below, we used weekly price data. Here we can see a lower price target of $44.
Bottom line strategy: The XLC is pointed lower and traders should avoid the long side of the ETF.
