Browse Articles by Section : *Sector Rotation*
Sector Rotation : Week 4/10
January 27, 2010
Last week, blood is seen everywhere in the market as Materials (-6.42%) lead the charge followed by Financials (-5.07%), Energy (-4.99%), Technology (-4.41%), Industrial (-4.23%), Utilities (-3.53%), Consumer Discretionary (-3.20%), Consumer Staples (-1.79%) and Health Care (-1.74%).
Cash is king when there are many uncertainties in the market. Another favorite will be government short-term bond. Lastly, Defensive sectors will also likely to outperform than any other sectors in the coming week.
Sector Rotation : Week 3/10
January 19, 2010
Last week, Health Care (1.54%) is the leading sector followed by Consumer Discretionary (0.13%), Utilities (0%), Consumer Staples (-0.07%), Energy (-0.15), Technology (-0.18%), Financials (-0.47%), Materials (-0.79%) and Industrials (-0.89%).
Most of the sectors posted negative results in last week except for the defensive sectors. Health Care is one of the promising sectors in this year especially with so much tension and unknown in the market going forward in 2010.
In conclusion, Defensive sectors will continue to attract investors to park their money in the coming weeks as they scrutinize the earnings reports.
Sector Rotation : Week 2/10
January 11, 2010
Last year 2009, the top 3 sectors goes to Technology (49.45%), Materials (46.23%) and Consumer Discretionary (40.24%). Financial (29.41%) also did quite well as it manage to outperform the S&P500 Index (27.65%). Industrials (22.34%), Energy (21.90%), Health Care (19.69%), Consumer Staple (16%) and Utilities (5.61%) fall under expectation.
This year, the main growth should be Energy and Material in the first few quarters. This is because of the excessive dollars that have already flooded in the market. They should be pushing for the higher price levels before the Fed decide to tighten the monetary policy. Once the Fed decided to tighten the monetary policy, mid to small cap local companies will likely to benefit from it.
Health Care will be another sector to look out for this year 2010. This is because they are one of the essential sectors to the economy and most of them are cash rich. Stability will also be the key for Health Care in this year. Safe money will likely to flow into the stable growth sector, Health Care.
The fate of the Technology sector in this year will be on the hand of the Tablet PC market. If the response from the public is good, then technology will likely to be the leader once again in this year. The main beneficiary will be the semiconductor company.
In conclusion, there are many promising sectors going forwards in this year. However, the confirmation is still not yet clear. Therefore there will be a certain amount of risk involve in each sector. The street will also look upon Oil and U.S. Dollars as guide to decide where to park their money. Lastly, trade with cautious will likely to emerge as a winner in this year.
Sector Rotation : Week 49/09
November 30, 2009
Last week, Health Care (0.39%) is the only sector in green as the streets lighten the other sector and pile some money into the defensive sector. Financial (-3.58%) is the biggest loser followed by Industrials (-1.93%), Technology (-1.63%), Materials (-1.28%), Consumer Discretionary (-1.11%), Consumer Staples (-0.88%), Energy (-0.54%) and Utilities (-0.37%).
There are so many uncertainties in the market nowadays such as Sovereign credit default, Santa Claus Rally, the fast falling Dollar, high Unemployment Rate and many more. Any disappointing news from the event will cause the market to panic. This is because the market had been rising for the past few months without a serious correction.
In conclusion, the best sector going forward to the end of the year will be holding cash. It will be better to have profit in the pocket to celebrate the year-end than anxiously praying that the market will survive in uncertainties.
Sector Rotation : Week 47/09
November 16, 2009
Last week, Consumer Discretionary (1.08%) after several companies being upgraded by analysts. Materials (1.01%) took the second spot followed by Technology (0.74%), Health Care (0.44%), Consumer Staples (0.34%), Industrials (-0.22%), Utilities (-0.27%), Financials (-1.08%) and Energy (-1.55%).
Gold continue to be in the limelight. Gold seem to be unstoppable in recent weeks as it making new high for the year. Everybody seems to love gold recently as it is the best investment tool currently. Gold offer the protection of weak dollar, a defensive play by nature and also benefit from the commodities rally.
While many people are buying gold, I would like to point out that Gold trade might be overbought recently. Alternative to gold, silver is another option to be considered. So far, Silver had not been in the limelight and it is at a better buying price than gold. Thus, Silver seems to be the best alternative for Gold trading.
In conclusion, Silver will likely to benefit from the rise of the Gold.
Sector Rotation : Week 46/09
November 10, 2009
Last week, Industrials (5.08%) was the big winner followed by Consumer Discretionary (3.77%), Materials (3.68%), Health Care (3.44%), Energy (2.66%), Technology (2.51%), Utilities (2.05%), Financials (0.99%) and Consumer Staples (0.46%).
Gold is currently the hottest industry in the market. Gold prices had been surging for weeks. Everybody including the central banker want to have a piece of the yellow metal had make Gold the best investment for the past few months. Many of them buy Gold to hedge against the Dollar and also to protect against any meltdown in the stock market. However, there is a bunch of professional warning against the risk of buying Gold at such a historical high prices due to recent speculation.
In conclusion, the market will remain clueless as it searches for leadership among the sectors.
Sector Rotation : Week 45/09
November 2, 2009
Materials (-4.55%) led the downfall in the market followed by Financials (-4.49%), Consumer Discretionary (-4.49%), Industrials (-4.46%), Energy (-3.64%), Technology (-2.74%), Utilities (-2.24%), Health Care (-1.16%) and Consumer Staples (-0.15%).
Materials’ weakness seen in the past 2 weeks was partly due to the strength of the Dollar. Risk aversion also prompted investors and traders to unwind this risky trade in the Material sector.
Transportation tumbled another 5% due to concerns of the economic health. So far, Transportation has tumbled more 10% in 2 weeks. Currently, the transportation index is holding at the important support level of 3,600. A break below the important support level will cause the transportation index to visit its 200 day moving average at around 3,300. Continued weakness from Dow transports are likely to put further strain on the 3 main benchmarks.
In conclusion, the market will be weak if the activities in the transport sector does not pick up going into the holiday season.
Sector Rotation : Week 44/09
October 26, 2009
A reversal of fortunes in the top spot from last week had brought the market down. Materials (3.01%) had led the decliners followed by Health Care (-2.64%), Industrials (-2.54%), Energy (-2.44%), Utilities (-2.26%), Consumer Staples (-1.7%), Consumer Discretionary (-1.4%), Financials (-1.24%) and Technology (-0.09%).
Transportation might be in big trouble this coming week. Last week, it tumbled more than 5% due to concerns of the industry growth. A quick look at the Dow Jones Transportation Average Index daily chart reveals a double top pattern. The Dow transportation index broke above and closed below the 50 day moving average. Further weakness from Dow transports is likely to put further strain on the 3 main benchmarks.
Airlines were the weakest in the Transportation sector. The airlines industry is likely to suffer in the coming months especially if oil prices remain above the $80 level.
In conclusion, the market will be weak if the Transportation sector accelerates to the downside.
Sector Rotation : Week 43/09
October 19, 2009
Once again the Energy (3.64%) took the top spot to lead the market higher for the week followed by Industrials (2.11%), Materials (1.46%), Consumer Discretionary (1.4%), Consumer Staple (1.31%), Health Care (0.76%), Utilities (0.47%), Technology (0.43%) and Financials (-0.91%).
Same story again with the weakness in the Dollar – it continues to spur the growth in the commodities sectors such as Energy and Materials.
Financial and Technology sectors took a beating due to the “buy the rumor, sell the news” trade last week.
In conclusion, the market will continue to surge higher as long as the Dollar remains weak. The sectors that are likely to benefit from the weak Dollar will be Energy, Industrial and Materials.
Sector Rotation : Week 42/09
October 12, 2009
This week, Energy sector pick up the leadership followed by Materials (4.62%), Financials (3.39%), Consumer Discretionary (3.19%), Technology (2.94%), Industrials (2.63%), Consumer Staple (2.17%), Health Care (1.94%) and Utilities (1.46%).
Energy and Material sectors lead the market as the weakness in Dollar continue to push up the prices of the commodities.
Financial and Technology sectors will be in focus this week. A slew of better than expected report will likely to push the stock prices in these 2 sectors into a high for the year.
In conclusion, the market will continue to watch for the earnings growth in the coming week to decide if the economy had truly began its recovery process.
