Top 7 Fidelity Select Funds for Sector Rotation Strategies

The stock market reacted positively to a better-than-expected job report today with all major indexes closing higher. The rally came as a relief after days of selling in both global and U.S. markets.

The market leading investments for the first six months of 2013 were Japanese stocks and the U.S. biotechnology sector. Now, as the summer gets under way, new sectors are emerging with the potential to take over market leadership.

The newly emerging sectors with increasing momentum include the automotive, health care, brokerage, defense, insurance, retailing and consumer discretionary sectors. We’ll be tracking the corresponding Fidelity Select funds closely for the next few weeks for early signs of the summer rally.

The Top 7 Fidelity Select funds with market leading momentum to be considered for sector rotation strategies are:

Fidelity Select Automotive Fund (FSAVX, last change: 2.00%)

Fidelity Select Automotive Fund (FSAVX, last change: 2.00%)

Fidelity Select Health Care Fund (FSPHX, last change: 1.38%)

Fidelity Select Health Care Fund (FSPHX, last change: 1.38%)

Fidelity Select Brokerage and Investment Fund (FSLBX, last change: 2.23%)

Fidelity Select Brokerage and Investment Fund (FSLBX, last change: 2.23%)

Fidelity Select Defense and Aerospace Fund (FSDAX, last change: 1.38%)

Fidelity Select Defense and Aerospace Fund (FSDAX, last change: 1.38%)

Fidelity Select Insurance Fund (FSPCX, last change: 1.56%)

Fidelity Select Insurance Fund (FSPCX, last change: 1.56%)

Fidelity Select Retailing Fund (FSRPX, last change: 1.74%)

Fidelity Select Retailing Fund (FSRPX, last change: 1.74%)

Fidelity Select Consumer Discretionary Fund (FSCPX, last change: 1.71%)

Fidelity Select Consumer Discretionary Fund (FSCPX, last change: 1.71%)

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

Update: The Armageddon portfolio continues to outperform

Will panic selling resume in the stock markets following the Labor Day weekend? No doubt, this is a difficult market to invest in.

Our favorite model portfolio continues to be the Armageddon portfolio published by FidelitySignal. See their report at http://fidelitysignal.com/aug_2011.

 

The market is at the cross-roads

The U.S. stock market indeces bounced back from their support level in the last few trading sessions, however the momentum is not very strong and the volume is light. The overall trend continues to be bearish until FUSEX moves above the trendline.

The Fidelity Spartan 500 Index fund (FUSEX).

As gold moving higher again reversing its recent pullback, gold stocks moved up to their resistance level. A breakout on high volume from this level would be considered very bullish.

The Fidelity Select Gold fund (FSAGX) has approached the top of its trading range.

The Fidelity Select Gold fund (FSAGX) has approached the top of its trading range.

The panic of 2011

In our blog post three days ago we said that we wouldn’t be surprised to see the selling continued. On Thursday and Friday the stock market sold off on higher than average volume. Unfortunately, the stock market is increasingly in a panic mode with brokers reporting a spike in trading volume, as individual investors sell their stocks.

The good news is that the Fidelity Spartan 500 Index fund (FUSEX) is near its support level. If the support holds, the market can bounce back from here next week. If the support doesn’t hold, renewed selling can ensue and the panic can accelerate.

The Fidelity Spartan 500 Index fund (FUSEX) is near its support level.

The Fidelity Spartan 500 Index fund (FUSEX) is near the support level.