Bullish: Big base and tactical cup and handle for PICK

The iShares MSCI Global Select Metals & Mining Producers Fund ETF (PICK) has a bullish setup with upside potential into the 73.09 to 77.50 area.

A breakout and successful retest from a 2021-2026 multi-year base pattern supports the case for further upside to 73.09 (61.8% extension of the April 2025-February 2026 rally projected from the late-March low) and 74.50 (big base target).

Interestingly, the retest of the larger base breakout also formed a tactical bullish cup-and-handle pattern from the January and February peaks. Sustaining this week’s rally above the neckline area at 64.94-63.52 would confirm the cup-and-handle breakout and support additional upside potential toward 77.50.

From a risk management perspective, if PICK struggles to hold its breakout, the rising 13-week moving average and the handle low at 60.07-59.85 represent important support levels. A sustained break below that area would weaken the immediate bullish setup and raise the risk of a failed breakout.

Overall, the combination of a confirmed multi-year base breakout, a constructive breakout-and-retest sequence, and a tactical cup-and-handle continuation pattern continues to support a bullish intermediate-term outlook for PICK and the broader metals and mining space.

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Bullish: SETM poised for bullish continuation breakout

The Sprott Critical Materials ETF (SETM) has consolidated within an ongoing uptrend since forming a weekly bearish engulfing pattern in late January. Rising 26- and 40-week moving averages (WMAs) across SETM’s absolute price trend, relative performance versus the S&P 500 Index, and its volume advance-decline indicator (VAD) all support the case for a developing bullish consolidation pattern.

Maintaining support above or near the rising 13- and 26-week moving averages from 35.46 down to 33.45, along with the early-February low at 32.43, would preserve confidence in the constructive setup. A decisive breakout above the 39.35-40.55 resistance zone is required to confirm the bullish continuation pattern and would project further upside toward 49.50.

If additional downside volatility emerges, SETM shows major support at 30.29-29.16, which is where the 38.2% retracement of the April 2025-January 2026 rally, rising 40-WMA, and late March higher low converge.

Importantly, SETM relative to the SPX and its VAD indicator are also trading within potential bullish consolidation patterns. These relative strength and volume measures corroborate the constructive absolute price setup and could help confirm a broader bullish continuation breakout if resistance is exceeded.

Overall, as long as SETM continues to hold its key moving averages and higher-low support structure, the technical evidence favors an eventual upside resolution from the current consolidation phase.

Bullish: USRT is breaking higher from a 4-year big base

The iShares Core U.S. REIT ETF (USRT) is breaking higher from a four-year cup-and-handle base pattern, reinforcing the constructive long-term technical outlook for U.S. REITs.

Sustaining the rally above 63.72-62.94 would keep this bullish breakout intact with upside potential to 67.50-68.08 (2022-2021 peaks and 100% extension of the late 2023-late 2024 rally projected from the April 2025 low) initially, and then higher toward 77.50 (pattern count), 79.96 (161.8% extension), and 82.25 (pattern count) on a longer-term basis.

Rising 13-, 26-, and 40-week moving averages at 62.34, 60.42, and 59.64, respectively, continue to underpin the constructive setup and support the case for sustained upside follow-through as long as the breakout area holds.

Bearish: XHB vulnerable on weakness versus the SPX and deteriorating volume

The SPDR S&P Homebuilders ETF (XHB) has a challenging and vulnerable technical setup. Relative weakness marked by lower lows versus the S&P 500 points to an ongoing lagging trend for XHB, while a breakdown and bearish retest in the ETF’s volume advance-decline indicator (VAD) suggest increasing distribution and elevated selling pressure.

The immediate technical pattern remains bearish below the deteriorating 13-, 26-, and 40-week moving averages at 104.49-108.44, as well as below the late-April lower high at 111.80. As long as XHB remains beneath these resistance levels, the setup favors continued downside risk toward 95.40-94.66, which marks the March low and the 61.8% extension of the February-March decline projected from the late-April peak. Initial downside risk also includes the rising 200-week moving average at 92.92.

If the weakness continues, XHB could eventually test the 86.61-84.07 area, which represents the breakout zone from the late-2021 through late-2023 cup-and-handle pattern as well as the 100% extension target of the recent decline. Beyond that, there is also a 161.8% extension target near 66.93.

Overall, deteriorating relative strength, weakening volume trends, and persistent resistance beneath weakening to declining moving averages continue to argue for caution on XHB unless the ETF can reclaim and sustain levels back above its major moving average cluster and late-April lower high.

Bearish: XRT at risk for head-and-shoulders top breakdown

The SPDR S&P Retail ETF (XRT) has broken down within a long-term lagging trend relative to the S&P 500 Index, while the ETF’s volume advance-decline indicator (VAD) is rolling over from a double-top formation. In our view, this deterioration in relative strength and volume is a bearish leading indicator for XRT, which has been developing a head-and-shoulders top pattern since last September.

Sustaining the recent breakdown below the weakening 13-, 26-, and 40-week moving averages at 83.30-85.20 keeps the immediate bias to the downside and leaves neckline support exposed at 78.29-77.24. A decisive break below this support zone would confirm the head-and-shoulders top and increase downside risk toward 73.44-71.78, which marks the May 2025 weekly upside gap and the rising 200-week moving average (72.85).

If downside momentum accelerates following a neckline breakdown, the measured objective from the head-and-shoulders pattern points toward 65. Until then, the developing topping structure remains intact below the shoulder highs at 89.01-89.41, which now represent important resistance for the bearish setup.

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