Scanning the Sector Charts

If this market drops, which sectors will be the hardest hit? If stocks continue to rise, which groups will outperform? These are always great questions to ask as we try to project our moves into the future the way a chess player might. Let's go to the charts to see where opportunities lie, on both the short and long sides.

According to the theory of sector rotation, as a bull phase matures, basic-materials stocks tend to perform well. Over the past 30 calendar days, the S&P Select Materials SPDR Fund (XLB) (in black) has outperformed the S&P 500 (green) by a significant margin. Big winners in this area are DuPont (DD), Dow Chemical (DOW) and PPG Industries (PPG), which we are still holding from late July....369 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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