2.    Healthcare (IYH) has returned to the second spot, but it remains nearly neck-and-neck with Industrial (IYJ). The surge in IYJ has stalled, but it is still sitting bullishly in the rankings. IYJ enjoys better growth projections, while IYH displays more compelling valuations.

3.    Financial (IYF) strengthened slightly this week, but Basic Materials (IYM) dropped in the relative rankings. IYF still shows the strongest (lowest) projected P/E, as investors remain uncertain about analysts' earnings projections. IYM has suffered erosion in analyst support.

4.    Telecom (IYZ) still dwells at the bottom of the rankings with a weak score of 1. IYZ remains saddled with the worst return ratios, lack of analyst support, and one of the highest projected P/Es. It is again joined in the bottom two by Utilities (IDU) with a score of 21. IDU has poor long-term growth projections and relatively high projected P/E.

5.    Looking at the Bull scores, IYM has been the leader on strong market days, scoring 56, followed by IYF and IYJ at 55. Utilities (IDU) is by far the weakest on strong days, scoring a meager 33.

6.    As for the Bear scores, IDU is the investor favorite "safe haven" on weak market days, with a score of 60, followed by IYH at 59. IYE has recovered nicely on its Bear score, so IYM now displays the lowest Bear score of 46, which means that stocks within this ETF sell off the most on weak market days. Only IYM and IYF score below 50 in this measure of defensiveness.

7.    Overall, IYW still shows the best combination of Outlook/Bull/Bear scores. Adding up the three scores gives a total of 191. IYZ is the worst at 99. IYJ shows the best combination of Bull/Bear with a total score of 106, while IDU has the worst combination at 93, as the "risk on" trade prefers alternatives to defensive-oriented Utilities, Telecom, and Consumer Goods stocks.

Top ranked stocks in Technology and Healthcare include VMware (VMW), NetEase.com (NTES), HMS Holdings (HMSY), and Jazz Pharmaceuticals (JAZZ).These scores represent the view that the Technology and Healthcare sectors may be relatively undervalued overall, while Utilities and Telecom sectors may be relatively overvalued based on our 1-3 month forward look.

Disclosure: Author has no positions in stocks or ETFs mentioned.About SectorCast: Rankings are based on Sabrient's SectorCast model, which builds a composite profile of each equity ETF based on bottom-up scoring of the constituent stocks. The Outlook Score employs a fundamentals-based multi-factor approach considering forward valuation, earnings growth prospects, Wall Street analysts' consensus revisions, accounting practices, and various return ratios. It has tested to be highly predictive for identifying the best (most undervalued) and worst (most overvalued) sectors, with a one-month forward look.

Bull Score and Bear Score are based on the price behavior of the underlying stocks on particularly strong and weak days during the prior 40 market days. They reflect investor sentiment toward the stocks (on a relative basis) as either aggressive plays or safe havens. So, a high Bull score indicates that stocks within the ETF have tended recently toward relative outperformance during particularly strong market periods, while a high Bear score indicates that stocks within the ETF have tended to hold up relatively well during particularly weak market periods.

Thus, ETFs with high Bull scores generally perform better when the market is hot, ETFs with high Bear scores generally perform better when the market is weak, and ETFs with high Outlook scores generally perform well over time in various market conditions.

Of course, each ETF has a unique set of constituent stocks, so the sectors represented will score differently depending upon which set of ETFs is used. For Sector Detector, I use ten iShares ETFs representing the major U.S. business sector.

About Trading Strategies: There are various ways to trade these rankings. First, you might run a sector rotation strategy in which you buy long the top 2-4 ETFs from SectorCast-ETF, rebalancing either on a fixed schedule (e.g., monthly or quarterly) or when the rankings change significantly. Another alternative is to enhance a position in the SPDR Trust exchange-traded fund (SPY) depending upon your market bias. If you are bullish on the broad market, you can go long the SPY and enhance it with additional long positions in the top-ranked sector ETFs. Conversely, if you are bearish and short (or buy puts on) the SPY, you could also consider shorting the two lowest-ranked sector ETFs to enhance your short bias.

However, if you prefer not to bet on market direction, you could try a market-neutral, long/short trade—that is, go long (or buy call options on) the top-ranked ETFs and short (or buy put options on) the lowest-ranked ETFs. And here's a more aggressive strategy to consider: You might trade some of the highest and lowest ranked stocks from within those top and bottom-ranked ETFs, such as the ones I identify above.