(By Rich Beglmeier) We might be in the early stages of sector rotation as we see a barbell look to this week's sector performance review. It's uncommon to see so many sectors line up in either the emerging bull or emerging bear columns and nearly nothing in between young bulls and bears.
What we have here is underperforming industries filling up with air and some recent winners deflating. To iStock, this "out with the old and in with the new", is a sure sign Wall Street is reallocating dollars for the market's next move.
Large cap growth stocks are preferred over their small and mid-cap cousins; however, growth of all sizes appears favored versus value investing, according to our technical analysis.
When growth stocks take the lead, it has been our experience that Wall Street believes the coast is mostly clear and willing to accept more risk; although, putting large cap at the top is more like wading into the water than jumping in head first. There is still room to turn back if the piranhas start chewing up prices.
Today's results confirm our technical view that indexes are likely to continue higher for the time being. Rotating from tiring sectors to fresh sectors is sort of like a relay race when the baton is handed to a pair of fresh legs ready to run. In this case, as many ex-leaders start to fade, a new group emerges; ready to take the next step.
As we do every Tuesday, a little later on today, iStock will highlight a few companies form the bullish sectors that meet out technical and fundamental tastes, and then we'll write more extensively about our favorite flavor in the group - make sure you check back.
Here's this week's sector performance review:
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
Oil Equipment & Services
Forestry & Paper
Large Cap Growth
MATURE BULL: Industries that have outperformed and their charts suggest the above average returns could continue:
MATURE BEAR: Industries that have underperformed and, based on their current chart patterns, could continue to lag:
Travel & Leisure
EMERGING BEAR: Industries that have fresh negative technical analysis set ups and could have subpar performance in the weeks ahead:
Property & Casualty
Travel & Tourism