Next Week’s Sector and Industry Group to Watch

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Every Friday during the DecisionPoint Diamond Mine trading room for DP Diamonds subscribers only, we do an in depth look at all of the sectors and choose a “Sector to Watch” that could see positive results the following week. We then dive into that sector and find an “Industry Group to Watch” as well as a few symbols that have potential.

I decided to reprint a portion of today’s DecisionPoint Diamonds Recap in which I review the top “Diamond in the Rough” of the ten selected during the week as well as the “Dud” of the week. I also review the RRGs and post the DP Sector Scoreboard. I’m only including the sections on “Sector & Industry Groups to Watch”.

You may not know this, but we now have “ETF Day” on Wednesdays where I select three ETFs that should ride the tide of current market conditions because not everyone likes to trade stocks.

The Friday hour and a half Diamond Mine allows for all symbol requests to be reviewed and real-time discovery of the “Sector to Watch” and “Industry Group to Watch”. I also reinforce the DecisionPoint trading strategy that I’ve created over the past two years.

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<drum roll> And, this week’s sector and industry group to watch are…

Sector to Watch: Healthcare (XLV)

While XLV hasn’t had an easy time, none of the sectors have. Choosing the Sector to Watch was challenging given none of the sectors carry positive momentum. It came down to outperformance against the SPY and participation readings not deteriorating further today. Not surprisingly, there are problems on this chart. The RSI is negative and has topped. The PMO topped and moved into a whipsaw SELL signal. It hasn’t been able to recapture the signal line, but at least the margin is very thin. Stochastics actually twitched up. %Stocks indicators are lower than the Silver Cross Index (SCI) and Golden Cross Index (GCI), meaning this is far from an improving chart. Most of the industry groups aren’t fairing well, but one does have some promise…

Good Luck & Good Trading,

Erin Swenlin


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Industry Group to Watch: Pharmaceuticals ($DJUSPR)

Not a pretty chart either, but it does have some bullish characteristics. The RSI is negative, but gently rising. The PMO is on a rather new crossover BUY signal. Stochastics have turned up and volume is coming in strong. It’s increasing its outperformance of the SPY. It is in a declining trend still, but support is holding at the June low. I’m not suggesting you should buy, but there were a few symbols that I found interesting in the Diamond Mine this morning: Bristol-Meyers (BMY), Johnson & Johnson (JNJ) and Merck (MRK).

Go to our Sector ChartList on DecisionPoint.com to get an in-depth view of all the sectors. On StockCharts.com you can find the Industry Summary.

Have a great weekend! Good Luck & Good Trading!

– Erin

erin@decisionpoint.com

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