Sector Performance Means Little, Industry Results More Telling - 05/14

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May 15, 2010

Don’t read too much into last week’s sector result - it was more about a dead-cat bounce, where the harder a sector fell, the firmer the short-term bounce was. The coming week’s results along with the four-week results at the end of the coming week will really be a more telling description of any bigger-picture trends here.

Sector Ranking, One Week

Sector Rank - Week Ending 05/14/10

While the sector ranking from last week may not mean much, the industry ranking may have spotted a few trend that supersede the broad market trend.

As we pointed out a couple of weeks ago, telecom is a defensive arena that investors should gravitation towards in times of turmoil; we clearly saw this action last week, from alternative carriers (e.g. Vonage) and wireless names. We also saw strength from the heavy electric al equipment names…. a group that’s been persistently (even if subtly) strong of late.

On the flipside, no surprises on the loser’s front….. fertilizer stocks still can’t get anything going. Consumer electronics names and personal products companies are also showing big pullback potential after doling out some of the biggest gains over the prior twelve months.

Industry Ranking, One Week