US stock market is caught in rotation on a daily basis.
TAPE is giving every indication that we are shifting from overbought sectors into deeply oversold sectors.
Smart money is also rotating out of overbought sectors for long term gains in oversold sectors.
There is tremendous money inflow in US equities based on yield factor alone.
Dividend stocks also getting attention.
Gold is nearing peak despite Warren Buffett half a billion purchase in GOLD. He may be calling a TOP. His performance lately has been sub par.
Oil stocks are deeply oversold
Airlines stocks are trashed
Cruise lines are being crushed.
Entire Oil & Gas complex are @ bargain.
Hotels are showing pulse
Restaurant showing sign that they are coming out of slump.
Casino stocks are showing life again, requires conviction & patience.
Technology will remain in focus as their earnings should improve with economic resurgence, it is all about PE, some sectors are sporting PE of dot com era of 1999....
My work is telling me that overweight in oversold sectors will give biggest bang for the buck, plus reduced weighting in Technology.
Markets keep changing every 6 months, be ready for upcoming change for next 6 months.
COVID-19 impact has been felt worldwide, most economies are adjusting to live with it.
Vaccine focus will shift into routine news, NOT a breaking news which has been overplayed.
US COVID-19 situation has tapered nicely, thus a sense of normalcy will return.
Schools are opening in September which is only 3 weeks away.
Stock market always looks ahead by minimum 6 months....
SO...readjust your investment thesis by shifting overweight into underweight and underweight into overweight.....
Good luck with your own thesis and comfort level.
BLOG does NOT give buy or sell.
Saleem
5 comments:
I agree completely with your assessment Saleem. My experience in the past week has been that the high flyers biotech, technology stocks tend to sell off as soon as they rise from low points. Overall had a bad last week with portfolio down by close to 9%. however, I did started rotating a few from high risk/overbought ones to beaten down stocks.
I am looking to enter airlines, airline servicing, Gaming/casino, Oil tanker/shipping companies stocks in the mix to help balance the portfolio next week.
Also, I do feel that market will sell off soon. Adding TZA or bear leveraged ETF's may not be a bad idea.
Thanks for sharing your inputs.
Paramjeet
Hi Paramjeet,
Appreciated your feedback.
It is always difficult to read the market accurately BUT some trends starts taking shape IF you watch closely.
BLOG has a deep purpose, to evaluate market and its direction!
Good luck on your major shift in portfolio allocation.
PS....we all have bad weeks, you had many superb ones!
Saleem
Hi Saleem,
Last week: +0.71% (YTD: +63.61%)
Notable Leaders: GAN HUBS ALB PSNL PLAN
Notable Laggards: CHGG BHVN SQ
It was a pause week for many high fliers, while some pullbacks were bought. This seemed like a pretty normal slow-August week actually with some mean reversion. I think market looks poised to move higher in the face of many worries, and chart-watching might provide the best returns for the short term. I think I still favor tech companies with a "re-opening" bias versus the most beaten down cyclical stocks as stocks at yearly highs tend to lose sellers as tax-deferring takes precedence.
Holdings: SQ PSNL RUN SWKS LITE AVLR PINS ELF GAN CHGG MTCH PLAN WEN BHVN, cash 13.4%
Stocktrader
Hi Stocktrader / Paramjeet
Last week UP 6.51%
YTD UP 46.09%
Saleem
Hi Stocktrader,
Remember KRYS. I was just checking out some old favorites and found that KRYS just bounced off the long trending sloping support is looking to uptrending. Also, their clinical drug KB407 got orphan drug designation by FDA for partients with Cystic Fibrosis.
Wanted to get your thoughts on the company.
Thanks
Paramjeet
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