Restaurant sector underperformance update

In March, I closed a short position in the S&P Restaurants Index versus the S&P 500 Index, following a bullish daily RSI divergence.

S&P Restaurants Index versus S&P 500 Index

• The divergence unwound for four months, then the long term sector rotation continued – the underperformance resumed
• Another bullish RSI divergence was formed on 18 September, marking a low

Weekly chart

• The daily RSI divergence coincided with the weekly RSI being oversold
• There is no MACD divergence, so no specific reason to think that the underperformance is over