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Abigail Doolittle: Bearish Trend In Materials Chart

Friday, 2 Mar 2012 | 1:54 PM ET

Materials stood out as the one sector ETF that has yet to reverse an intermediate-term downtrend, Peak Theories Research’s Abigail Doolittle said Friday.

The reason?

Investors’ lingering concerns about the true health of the economy, Doolittle said on “Fast Money.”

Material Stocks Close to a Breakdown?
A look at the one sector ETF that has yet to reverse an intermediate-term downtrend, with Abigail Doolittle, Peak Theories Research.

“We also see that the XLB is trading in a consolidation pattern over the last few weeks. It appears right now to be a double top. This pattern confirms at $36.40. If it closes below that level the target is $35,” she said. “Overall, I would say the XLB looks vulnerable to maybe a 5 to 10 percent decline, and, again, this probably reflects some sort of worries about the economy.”

The trend shows up in copper, too, she added.

Also vulnerable to a breakdown is Freeport-McMoRan.

Doolittle said the charts showed “a bearish descending triangle” right on top of its 50-day moving average.

“If that pattern confirms with a close of $42, the target’s $35,” she said. “It really looks like it could drop to that level pretty quickly, probably on worries of slowing growth out of China and perhaps even building inventories in copper.”

Trader Joe Terranova noted that Freeport-McMoRan had been a proxy play on copper over the past few years.

“We even called it an ETF,” he said, adding that buying interest in the company’s stock might have been replaced by an actual copper ETF, CPER. “That’s your copper ETF trade.”

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Trader disclosure: On March 2, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Edwards is long (NEE); Edwards is long (NKE); Edwards is long (AAPL); Edwards is long (VLO); Terranova is long (VRTS); Terranova is long (MCD); Terranova is long (GS); Terranova is long (NXPI); Terranova is long (IBM); Terranova is long (MCD); Terranova is long (EMC); Terranova is long (MSFT); Terranova is long (GS); Terranova is long (JOY); Terranova is long (OXY); Terranova is long (LQD); Najarian is long (AAPL); Najarian is long (HFC); Najarian is long (MRO); Najarian is long (WYNN); Najarian is long (WFT); Najarian is long (FIO); Najarian is long (CRM); Kilburg is long (TLT); Kilburg is long (USO); Kilburg is long (SPXU); Kilburg is short euro currency futures; Kelly is long (USG); Kelly is long Copper

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