The Deep Dive

Sector and Industry ETFs

Good morning advisors!

This week’s edition of The Deep Dive is nothing more than a fast-paced look at ETFs with specific focuses. Some are sectors, some are industry-plays, some are thematic. But I’m going to break down where the opportunities are, the ETFs that are showing relative strength (but not yet going up), and the areas of the market that you must continue to avoid.

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Looks good on the long side

OIH: Oil Services

The Monday Morning Playbook talked about stocks beginning to break out again in energy, and OIH is one of the best-looking subsector ETFs out there right now. It closed at its highest level since 2019 on Monday and is obviously a relative leader.

XOP: Oil and Gas Exploration and Production

XOP is another aggressive energy subsector play for advisors looking for something more than just XLE. It broke out to its highest level since the summer late last week and hit 52-week relative highs on Monday.

EWW: Mexico

EWW is breaking out in a major way in relative terms and closed at a three-month high on Monday. RSI-14 is overbought and the ETF is right at its late May highs, but Mexico looks buyable on any pullbacks.