After oil volume increased following the US ban on Russian oil imports, the oil ETF (USO) closed roughly unchanged from its opening price yesterday.
This makes the USO interesting to watch for Wednesday’s trading session, as the price action shows that a big battle between buyers and sellers is still going on. It’s also worth watching affected sectors like transportation (IYT) and retail (XRT) as they approach support (below).
The stock market reaction remains choppy, with investors watching prices at the pump rise while other commodities are hit by higher transportation costs.
With rising freight costs, this may have a negative impact on inflation figures which have already exceeded 7%. Nonetheless, the major indices are still holding above recent support levels.
ETFs in the transportation sector and ETFs in the retail sector
One sector that is always good to keep an eye on is the transportation sector (IYT), which holds support from the lows at $243-$245.
IYT will be particularly interesting to watch if oil prices continue to rise.
Along with rising shipping prices, we should also be watching the retail space through the retail ETF (XRT).
Currently, XRT is maintaining its recent gap low of 2/24.
It can be useful to look at XRT and IYT together, as each can hint at a possible long-term economic downturn through the movement and purchase of commodities.
Therefore, investors can watch for each to hold or break below key support levels, as seen in the charts above.
ETF trading analysis and summary:
S&P 500 (SPY) 410 is price support.
Russell 2000 (IWM) 188 is price support.
Dow (DIA) 322 is price support.
Nasdaq (QQQ) 318 is price support.
KRE (Regional banks) 65.46 is the next price support.
SMH (Semiconductors) 246 is a pivot level.
IYT (Transportation) 243-245 is the price support zone.
IBB (Biotechnology) 118 is price support.
XRT (retail) 70 is price support.
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