Conclusion, Investment Implications, Strategy

The iShares U.S. Oil Equipment & Services ETF (IEZ) is amid favorable technical / quantitative conditions to continue its recent trend of outright strenth amid relative outperformance versus the benchmark S&P 500.

Current Sector & Industry Group Ideas

Table 1 below is also accessible via the Sector & Industry Group Ideas rectangle at the top of the Research Center.

Table 1

Click the table to  make it larger

This table also regularly appears in our weekly Keys To This Week: Sector & Industry Groups report published on Monday mornings.

Analysis and Rationale

The upper panel of Chart 1 below plots the iShares U.S. Oil Equipment & Services ETF (IEZ) daily since May along with its 200-day moving average, a widely-watched major trend proxy.  The lower panel plots the corresponding daily relative performance of IEZ versus the SPDR S&P 500 ETF Trust (SPY) along with its 63-day moving average, which we use to identify the Strategic (quarterly) trend of relative performance versus the broad market. 

Chart 1

The green highlights in the upper panel show that KIE is in the midst of a Jun 7th major uptrend that was successfully tested earlier this month.  The lower panel shows that KIE is also in Jly 3rd trend of Strategic relative outperformance versus SPY, which was successfully tested on Oct 6th.

The upper panel of Chart 2 below also plots IEZ daily since May, but this time with its 50-day moving average (minor trend proxy) and a corresponding chart of the daily total net assets invested in IEZ (AUM) and their 21-day moving average in the lower panel.  We use the 21-day MA to determine these assets’ Tactical (monthly) trend.  The green highlights point out that these assets have been in a trend of monthly expansion since Aug 30th,

Chart 2

This combination of a bullish major trend, Strategic relative outperformance versus the S&P 500, and Tactical asset expansion indicate favorable conditions for a continuation of recent strength and relative outperformance by IEZ.