(By Rich Bieglmieir) With the market gyrating now, unfortunately closer to the bottom edge of trouble than the top, it's important to know which sectors are ready to roll and which are ready to rollover.
In browsing a book on ETFs at Barnes and Noble in the Old Orchard Shopping Center, the author used the top performing sectors for the past six months as one of his keys for building his buy candidate list.
The book confirms studies iStock has read regarding the importance of monitoring sector performance; the one exception being timeframe. Most research articles we've reviewed believe three month performance is a better starting point than six.
While our sector performance review doesn't focus on three or six month performance, it does compare more than 150 sectors and industries relative to the S&P 500. iStock wants to know, and you should too, which groups are about to get on the clock and which are on break or vacation.
iStock would suggest paying particular attention to oil & gas, particularly integrated oil and gas distribution stocks. Their charts look good. On the flip side, it might be time to consider taking profits in travel & leisure, hotel, and home improvement stocks. Their charts look toppy.
Here is the complete list; we will follow up with some of our favorite stocks from the buy lists.
EMERGING BULL: Industries with positive technical analysis traits that are in the early stages, indicating possible above average returns in the near-term:
Oil & Gas
Integrated Oil & Gas
Exploration & Production
MATURE BULL: Industries that have outperformed and their charts suggest the above average returns could continue:
Large Cap – especially value
MATURE BEAR: Industries that have underperformed and, based on their current chart patterns, could continue to lag:
Electronic Computer Equipment
Durable Household Goods
Technology (graduated from emerging bear)
EMERGING BEAR: Industries that have fresh negative technical analysis set ups and could have subpar performance in the weeks ahead:
Travel & Leisure (the folks are holding on to their wallets)
Property & Casualty Insurance