Basic Materials fragile relative strength

Of 4 important industry groups compared against the Dow, Basic materials have the weakest relative strength with a minus 3.03% for the last month.


The 7 days move from 297.19 to 283.20 retraced an 81% to 294.56, after that the group has been on a trading range.


Like most, I’m waiting for the end of this uptrend, that is not confirmed yet but Basic Materials looks promising for shorting.

My short trigger for today is a close below 286.91 with a stop at 291.17.

The Proshares ultra short basic materials (SMN) is a 200% inverse fund that has a decent 600,000+ average trading volume daily. Buying the fund could be an ideal instrument for shorting the group.