Find Winners In Strong Industry SectorsAt any given time, certain industry sectors dominate the market. Stocks within the strongest sectors see most of the big moves, activity and volume, while stocks in the weakest groups tend to struggle. That is why it is important for traders to concentrate on stocks in the strongest sectors, as this is where the market’s big winners are usually found. Throughout the course of a year, even strong industry sectors can drop out of favor, to be replaced by others, and since the stocks within a sector tend to move in tandem, once the move is in progress, most of the stocks in the declining sector will usually begin to struggle at the same time. Analysts call this “sector rotation.” On the other hand, industry sectors that are resurgent should be watched closely especially in market upturns, because after the market experiences a sharp sell off, sectors considered “defensive” or “non-cyclical” that are not affected by the economy, like utility stocks for example, slowly start to become weaker, as tech issues become strong. Investors Business Daily currently tracks the top 33 industry sectors. Moreover it shows where an industry sector was in the past six, ten and 14 weeks, so you can get a better idea as to where each sector appears to be headed. | ||||
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