Investing
Consumer Discretionary vs. Technology: Who Leads in 2025?Introduction:
This week, we’re analyzing two major growth-oriented sectors—consumer discretionary (XLY) and technology (XLK)—to uncover which might lead the market in 2025. The ratio between these sectors offers key insights into their relative strength and momentum, helping investors identify where to find potential outperformance.
Sector Dynamics:
Technology: As the largest and most influential sector in the stock market, tech often drives broader market trends.
Consumer Discretionary: With consumer spending accounting for nearly 70% of U.S. GDP, the health of this sector is crucial for sustained economic growth.
While both sectors thriving is ideal for market strength, discerning the one with stronger momentum is key for alpha seekers.
Analysis:
Recent Performance: Since June, consumer discretionary stocks have outperformed technology, showing short-term strength.
Long-Term Trend: Despite recent outperformance, the longer-term trend in this ratio has been downward, favoring technology.
Key Pattern: The ratio is approaching the resistance of a broadening wedge formation. A breakout above this resistance could indicate unexpected strength in consumer discretionary stocks, suggesting that the consumer may play a larger role in driving growth in 2025.
What to Watch:
Bullish Scenario: A confirmed breakout above the broadening wedge would signal relative strength in XLY, potentially shifting the leadership narrative.
Bearish Scenario: A rejection at resistance and a continuation of the downward trend would reinforce technology’s dominance.
Technology Bullish Play:
Entry: Wait for the ratio to roll over and confirm rejection at resistance.
Target: Position for XLK to regain its leadership role.
Stop Loss: Manage risk with stops above the wedge resistance.
Conclusion:
Both XLY and XLK play vital roles in market performance, but identifying which sector could dominate in 2025 is critical for investors. A breakout in the XLY-to-XLK ratio would signal an important shift in sector leadership, while a continuation of the downtrend reaffirms technology's dominance. Which sector do you think will lead the charge? Share your thoughts below!
Charts:
(Include a chart displaying the XLY-to-XLK ratio, the broadening wedge formation, and key levels of support and resistance. Highlight the short-term outperformance of XLY and the long-term downward trend favoring XLK.)
Tags: #ConsumerDiscretionary #Technology #XLY #XLK #GrowthStocks #SectorLeadership #TechnicalAnalysis
Netflix (NFLX): Explosive growth, but caution aheadNetflix ( NASDAQ:NFLX ) is set to open 14% higher after adding a record-breaking 18.9 million subscribers in Q4—nearly double Wall Street’s expectations and well above the early 2020 peak of 15.8 million. These incredible numbers have sparked a strong market reaction, and the enthusiasm is well-justified.
Following this update, we’ve re-evaluated the chart. While we anticipate the potential for more upside, it’s unlikely that NASDAQ:NFLX will continue climbing without a significant correction at some point. The trendline since May 2022 has proven its importance, serving as resistance nine times before being flipped into support and holding firm on a key retest.
Currently, Netflix is approaching the significant psychological level of $1,000. If this level is reclaimed, a further push toward $1,070 and even $1,300 could materialize. However, we’re exercising caution as major levels and target zones have already been achieved. There is a chance—albeit slim—that today’s earnings gap could mark the top of wave ((v)) and wave 3.
For now, we’re waiting for further developments and will decide our next steps as the stock’s trajectory becomes clearer. Stay tuned for updates.
Made in England.. FTSE 100 Triangle BreakoutFinally the long term triangle pattern in blue chip UK stocks has broken - and the weekly chart for the FTSE 100 index is looking very positive.
The breakout weekly candle is a long one with a close right near the highs - showing bulls are well in control of the market.
We can see the triangle break in more granular detail on the daily chart with the break confirmed on Thursday and a strong follow-through move on Friday.
Support is found first at the former all time high (8450-8475) then back at the broken trendline from the triangle pattern.
These support levels define our risk - the price back inside the triangle will inform us the breakout has failed - this time at least.
But if things move as we expect, using the height of the triangle pattern as a price objective from the breakout point, the UK 100 could reach 9,000.
But - as always - that’s just how the team and I are seeing things, what do you think?
Share your ideas with us - OR - send us a request!
Comments welcome :)
cheers!
Jasper
The material provided in this article is for information purposes only and should not be understood as trading or investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Trading Writers and has not been prepared in accordance with the legal requirements designed to promote investment research independence. If you rely on the information on this page, then you do so entirely at your own risk.
Adobe (ADBE): Patience Pays Off After 35% RallyFollowing our last analysis of Adobe (ADBE), the stock saw a 35% rally from June to September, only to flush back to our preferred range—a clear reminder of the importance of considering the bigger picture rather than chasing every setup. Six months later, Adobe now trades below our initial analysis levels, reinforcing the value of patience. Currently, the stock has tagged the 61.8% Fibonacci retracement level, showing a promising reaction. However, reclaiming and flipping the key resistance at $446 with strong momentum is crucial. If this level is reclaimed, we will look for a pullback to bid at this key zone.
Should Adobe fail to reclaim $446, another drop toward the $386–$350 support range becomes highly likely. As such, we are not rushing into long positions for the sake of being positioned.
On the fundamental side, Adobe faces critical challenges as investors question its ability to monetize new AI features and fend off competition from emerging startups. These factors will play a key role in shaping the company’s outlook. For now, we remain patient, watching for clear rejections or reclaiming of the key levels.
Key Resistance: $446
Key Support: $386–$350
47% GROWTH》GODREJPROP SHOWING A GOOD REVERSAL SIGN FROM BOTTOMRecently NSE:GODREJPROP almost drawdown 19% from recent high and we plan for almost 47% upward potentially reward.
🔔 NOTE:
➡️ ENTRY ONLY IF the weekly candle CLOSES ABOVE 2550 INR.
📊 Godrej Properties (GODREJPROP) is exhibiting a positive reversal from its bottom levels. However, ⚠️ signs of weakness remain visible.
✅ Suggestion:
Wait for a strong confirmation with the weekly close above 2550 INR to enter.
Once confirmed, bullish momentum could target long-term profits at the 3802 INR level.
🎯 TARGET LEVELS
TP-1 🟡: 2836.25 INR
TP-2 🟠: 3026.00 INR
TP-3 🟢: 3405.90 INR (50% Profit Booking Recommended Due to Resistance ⚒️)
TP-4 🟩: 3802.00 INR (Long-Term Target – 9 to 12 Months 🚀)
📉 STRICT STOP LOSS (SL):
2240.90 INR 🚫 (Ensure proper risk management here!)
⚡ Action Plan:
If entry conditions are met, follow the targets and risk levels carefully. This stock offers an excellent reward-to-risk ratio, but confirmation is key! 🕒
🔴DISCLAIMER:
I AM NOT A SEBI-REGISTERED ANALYST. SECURITIES AND INVESTMENTS ARE SUBJECT TO MARKET RISKS. PLEASE READ AND UNDERSTAND THE TRADING IDEA CAREFULLY BEFORE MAKING ANY INVESTMENT DECISIONS. INVEST WISELY AND AT YOUR OWN RISK. 📉📈
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DXY SINGLING DANGER!Any Time The Dollar Gets In This Range Bad Things Happen!
With the exception of the 2008 GFC which confirmed we have entered Debt Deflation (Meaning the Gov will need to borrow more and more, faster and faster without any benefit to the real economy). A strong dollar is signaling something very bad is coming.
Gun to head I would guess something like an Asian Currency Crisis. Russian ruble & economic collapse is now a certainty! Russia has lost the war no matter what they are trying to do on the battlefield it is irrelevant as the economy is now suffering from Dutch Disease. (So Much for the BRICS fantasy!)
Most Americans believe a strong dollar is good. They are wrong. Here are a few things to know about a strong US Dollar.
1. A strong dollar weakens exports, costing American jobs as everything America made becomes more expensive to the rest of the world.
2. US Imports increase as everything internationally made becomes cheaper.
3. Acquiring USD as foreign reserves becomes much more difficult and expensive. As exporters to the US have to produce more for less $s.
4. US investment in international currency collapses, forcing inflation, rates higher making borrowing/investment in foreign economies weaker. Leading to a snowball effect.
5. Commodities are traded in USD. As such energy/food to many poor nations will become a problem as they are net importers with already limited access to NYSE:S it will be magnified.
6. Finally (I could go on but I won't you get the point) when everyone leans on one side of the boat it capsizes. Meaning when everyone is running to invest in the US & the dollar.
Techanically how high can the USD go?
-120 is likely. (hopefully not much more)
-Longer term if things get bad enough it can break all-time highs of 165 as we have this massive bottoming inverse HEAD & SHOULDERS in place. CARNAGE!
- What I hope will happen is that it hits previous recent highs of 115 and that will be it for the upside. HOWEVER!
We do have a rising structure that needs to be corrected. As such when it does correct there is a good possibility it tests previous lows.
For now, if you live in the US. enjoy dollar strength and think about how much worse inflation would have been if the $ was weakening. ))