GET DAILY SIGNALSConsumer Discretionary ETF Hitting Downward Sloped Trend Line as Earnings Season Kicks Off
Stocks have bounce back nicely since the selloff on Christmas Eve. All 10 of the main sectors have gained ground during this period, and the S&P is up 10.43% from the close on December 24 through the close on January 11. The energy sector has led the way during this rally, but the consumer discretionary sector has the second biggest gain at 13.7% over the 13 trading days in question.
While the rally has likely made investors more comfortable, they might not want to get too comfortable as some of the sector ETFs and index ETFs are starting to hit potential resistance points. One sector ETF that is hitting a possible resistance point is the Consumer Discretionary Select Sector SPDR (NYSE: XLY).
The ETF has jumped from down around the $92 level to close at $104.58 on Friday. This puts the XLY in contact with a downward sloped trend line that connects the highs from October and December.
It should also be noted that the XLY is overbought based on the daily stochastic readings and the indicators just made a bearish crossover.
The ETF hitting the trend line at this time is notable as earnings season kicks off this week and three of the top six holdings in the XLY will be reporting quarterly results between now and the end of January. These earnings reports could serve to help the XLY break out of the downward trend or they could be the catalyst that causes it to resume the downward trend.
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Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
VCR in upward trend: 10-day moving average broke above 50-day moving average on October 26, 2026
The 10-day moving average for VCR crossed bullishly above the 50-day moving average on October 26, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 15 of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 88%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 26, 2026. You may want to consider a long position or call options on VCR as a result. In 66 of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 81%.
VCR moved above its 50-day moving average on October 26, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +0.86% 3-day Advance, the price is estimated to grow further. Considering data from situations where VCR advanced for three days, in 264 of 322 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
The Aroon Indicator entered an Uptrend today. In 223 of 265 cases where VCR Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 84%.
Bearish Trend Analysis
The 10-day RSI Indicator for VCR moved out of overbought territory on November 05, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 28 similar instances where the indicator moved out of overbought territory. In 21 of the 28 cases, the stock moved lower in the following days. This puts the odds of a move lower at 75%.
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where VCR declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 82%.
VCR broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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