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Sector Performance Review: Setting Up For The Holidays

 November 13, 2012 10:03 AM
 


(By Rich Bieglmeier) Despite a week of weak stock performance, more sectors appear ready to outperform the S&P than underperform the index. Admittedly, many are walking the line between treading water or sinking, they just haven't stopped paddling, yet.

For the second week in a row, industrial stocks of many varieties managed to move their way into both the emerging and mature bullish camps. iStock sees the week-to-week follow through a clear indication that Wall Street is accumulating the sector. Remember, accumulation precedes appreciation, the sector and sub-industries could be good hunting grounds to find winners in the days and weeks ahead.

Not surprisingly, a few sectors that should benefit from an extended holiday shopping season joined industrials in the week's bullish columns. With an early Thanksgiving next week, retailers have an extra week to get their goods out the door. People shopping bode well for delivery services, restaurants and bars, and toys, of course.

[Related -Caterpillar Inc. (CAT) Q4 Earnings Preview: A Fifth Wheel About To Come Off?]

On the other-end of bull-bear street, we find technology and telecom stocks showing the most weakness. For the most part, earnings have been underwhelming for tech stocks, from Apple (AAPL) to International Business Machines (IBM) to Google (GOOG) to… quarterly report cards have been disappointing.

[Related -Apple Inc. (AAPL): How Q1 Earnings Will Fare?]

However, there could be another angle in play. With President Obama being re-elected, it's believed that capital gains taxes are going up in 2013. Many tech stocks have big profits in them despite recent selloffs. There could be some wash-selling happening; taking the gain now and waiting the required 30 days to buy the stock back.

EMERGING BULL: Industries with positive technical analysis traits that are in the early stages, indicating possible above average returns in the near-term:

  • Aerospace
  • Delivery Services
  • Asset Managers
  • Industrials
  • Industrial Engineering
  • Industrial Transports
  • Pipelines
  • Restaurants & Bars
  • Food Products
  • Food Producers
  • Commercial Vehicles
  • Trucking
  • Transports
  • Toys

MATURE BULL: Industries that have outperformed and their charts suggest the above average returns could continue:

  • Building Materials & Fixtures
  • Construction & Materials
  • Financial Administration

MATURE BEAR: Industries that have underperformed and, based on their current chart patterns, could continue to lag:

  • Computer Hardware
  • Electricity
  • Fixed Telecom
  • Electronic Office Equipment
  • Apparel Retail
  • Tobacco
  • Technology
  • Tech Hardware

EMERGING BEAR: Industries that have fresh negative technical analysis set ups and could have sub-par performance in the weeks ahead:

  • Large Cap
  • Telecom
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