The Materials Sector has had a lot of people saying its good investing as it’s holding its own now in this bear market. So let’s take a look and see what the charts are telling us.

If looking at the daily chart of the materials sector (XMJ), it would be easy to see why so may think it’s a good investment right now. November was the last low it hit in 4 years (2005) and it has been slowly creeping up since. This makes a basis for long opportunities in SHORT TERM trades,  as the last 3 months or more are up. But what about for LONG TERM investing?

If long term is more your style you must look at the weekly and see what the charts are saying. On the weekly XMJ, November was the bottom of the first Lower Trough (LT). As mentioned in previous post, Lower Peaks and Lower Troughs tell us the sellers are in control. Then there is significant resistance at 9290 where twice now it has failed to break through and is trying to push it back down. Could this be the next major peak forming? If so it will be a Lower Peak confirming the sellers are still in control. Therefore the highest probability trades for LONG TERM on this sector right now would be short.

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