Sector Rotation: Declining Oil Price Boosts Retailing and Automotive Stocks

The price of energy-related commodities, such as light crude oil, experienced a sharp short-covering rally at the beginning of the week, but the downtrend appears to be resuming again:

oil

As consumers save money at the gas pump, they have more disposable income to spend at the shopping mall or to purchase merchandise online, which boosted the earnings prospects of companies in the retailing sector. The Fidelity Select Retailing Fund (FSRPX) is an excellent way to take advantage of this trend:

fsrpx

Car company stocks also responded positively to declining energy prices. Should this trend continue into the summer months, the strategy of overweighting the Fidelity Select Automotive Fund (FSAVX) and underweighting energy stocks may offer the most optimal portfolio allocation approach:

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Read more about investment strategies at FidelitySignal.com

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Sector Rotation: Automotive Stocks Lead the Market

Fidelity Select Automotive Fund (FSAVX, last change: 1.47%)

The Fidelity Select Automotive Fund (FSAVX, last change: 1.47%) has moved to the number one position in the FidelitySignal.com Top 10 Ranking of Fidelity mutual funds with a solid 20.84% 3 month return.

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

Stocks close higher following an impressive late afternoon surge of buying

The Fidelity Spartan 500 Index fund (FUSEX) closed up 2.28%. The Automotive sector was the top performer today. In spite of the impressive gain, we warn investors that the U.S. stock market is still in a downtrend.

The top gainer of the day was the Fidelity Select Automotive fund (FSAVX, change: 5.23%), but the trend is still down.

The top gainer of the day was the Fidelity Select Automotive fund (FSAVX, change: 5.23%), but the trend is still down.

Mutual fund screens are provided by FidelitySignal.com  

Stomach-churning market volatility continues today

The Federal Reserve announced “Operation Twist” today, a plan to lower interest rates by buying long-term treasury bonds. The stock market reacted to the news in the afternoon with across the board selling. The clear winner of the day was the Fidelity Spartan Long-Term Treasury Bond fund.

Fidelity Spartan Long-term Treasury Bond (FLBIX, change: 2.56%)

Fidelity Spartan Long-term Treasury Bond fund (FLBIX, change: 2.56%)

No stock market sector was immune to the news with several sectors loosing more than 5% in a single day! The funds with the largest losses were the energy services, the automotive and the real estate sectors funds. The market conditions continue to be extremely dangerous for equity investors.

Fidelity Select Energy Service (FSESX, change: -5.57%)

Fidelity Select Energy Services fund (FSESX, change: -5.57%)

Fidelity Select Automotive (FSAVX, change: -5.22%)

Fidelity Select Automotive fund (FSAVX, change: -5.22%)

Fidelity Real Estate Investment fund (FRESX, change: -5.17%)

Fidelity Real Estate Investment fund (FRESX, change: -5.17%)

Mutual fund screens are provided by FidelitySignal.com