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Share Market Weekly Review: Bullish On Vacations

 January 03, 2013 01:28 PM

(By Rich Bieglmeier) With stocks charging higher along with taxes for most Americans, iStock expected to find a slew of bullish sectors in this week's sector performance review. We were not disappointed. The number of bullish industries outnumbers bearish friends by a little more than two to one.

We see a strong trend and liking for industrial, chemical and some discretionary spending stocks. Meanwhile, retail and healthcare related stocks could be in trouble, in the days and weeks ahead.

It looks as if Wall Street anticipates that consumers will spend money on vacationing and furnishings, but not on clothing or general merchandise. But, don't most buy new clothes before going on vacation?

Semiconductors, gambling, hotels, and telecom equipment have the "best look" to them in our view. We'll be scanning through each of them for some potential ideas.

[Related -Savings Glut and Financial Imbalances]

Traders also appear to be worried about healthcare stocks as sub-industries such as biotechs, pharmaceuticals, and medical equipment (Obamacare tax casualty?) joined the broader healthcare sector in the two bearish columns. A bearish consensus on retail stocks is evident with specialty retail, broadline retailers, and general retailers firmly exhibiting under-performance characteristics.

Investors looking to take advantage of and make the most of another "January Effect" might consider adding companies from our bullish sectors and avoiding the bears.

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

  • Basic Materials
  • Gambling
  • Commercial Chemicals
  • Travel & Leisure
  • Telecom Equipment
  • Industrial Suppliers
  • Marine Transport
  • Real Estate
  • Semiconductors
  • Steel
  • Commercial Vehicles

[Related -A Dividend Aristocrat Is Now On Sale]

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

  • Asset Managers
  • Electronic Equipment
  • Auto Parts
  • Media
  • Building Materials & Fixtures
  • Chemicals
  • Construction & Materials
  • Electronic Components
  • Electrical Equipment
  • Industrial Machinery
  • Industrials
  • Industrial Engineering
  • Hotels
  • Tires
  • Furnishings
  • Small-cap Value
  • Small-cap
  • Low-cap
  • Mid-cap

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

  • Medical Equipment (graduated from emerging bear)
  • Beverages
  • Specialty Retail
  • US Gas Distribution

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

  • Biotech
  • Clothing
  • Pharmaceuticals
  • Broadline Retail
  • Retail
  • General Retailers
  • Healthcare   
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