The Dow Jones Industrial average moved above the psychologically important 16,000 level today, the first time in the history of the stock market. This is clearly a sign that the great bull market of 2013 is still intact.
As we approach the seasonally strong December, it is worth taking a closer look at where the market leadership is coming from. The table below shows the top 10 Fidelity mutual funds ranked by momentum, courtesy of FidelitySignal.com.
Top 10 Fidelity Mutual Funds by momentum
The table shows that the Fidelity Select Leisure Fund (FDLSX) is moving up the fastest in the momentum ranking. In addition, FDLSX had the largest gain today out of all Fidelity mutual funds. The ranking also shows that today’s rally is broad based, which usually is highly bullish for the stock market.
After the recent consolidation in multiple sectors, the stock market accelerated to the upside today. The Dow closed above 14,000 for the first time since 2007 and 98% of Fidelity’s sector funds closed higher. International funds also did well today, but U.S. equities show stronger performance.
Fidelity funds investing in natural resources stocks, financials, technology, transportation, health care and small caps are emerging as the momentum leaders. Here is the list of the top 10 Fidelity domestic equity funds and their 2013 return:
Fidelity Select Energy Services, 13.01%
Fidelity Select Brokerage and Investment, 11.07%
Fidelity Select Medical Equipment and Systems, 10.79%
Fidelity Select IT Services, 10.05%
Fidelity Select Transportation, 9.42%
Fidelity Select Natural Gas, 9.01%
Fidelity Select Energy, 9.01%
Fidelity Select Insurance, 8.76%
Fidelity Select Biotechnology, 8.76%
Fidelity Small Cap Discovery, 8.68%
The Fidelity Select Medical Delivery fund (FSHCX, change: 1.59%) is one of the best performing Fidelity sector funds year-to-date with a 9.62% gain. A breakout above the resistance line would confirm that this sector is one of the market leaders.
The Fidelity Select Electronics fund (FSELX, change: -4.10%) and the broader technology sector has led the recent stock market rally. Unfortunately, the rally has stalled recently and a breakout to new highs is needed to provide new market leadership. Otherwise, sadly, we may not see a Santa rally this year.