Sentiment is Turning Bullish Again; Five Sectors that can Lead the Market Higher

Strong earnings and a potential breakthrough in the negotiations with North Korea made investors feel more cheerful and caused a broad rally in the stock market.


Equity markets around the globe rallied in recent days, but the U.S. market continues to be the leader.

Rising tensions in the Middle-East and the strengthening dollar resulted in the energy and natural resources sectors becoming the strongest performers in the last three months (see article):




Large-cap real estate stocks also rallied, as we highlighted earlier (see more):



We also like the bullish trends in technology, medical devices, and financials sectors:





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Sector Rotation: Energy Services is the New Momentum Leader


Our daily technical analysis screen shows that the Fidelity Select Energy Services Fund (FSESX, last change: 1.72%) reached the top momentum ranking position. We highlighted natural resources as one of the most exciting investment areas for the fall of 2012 in our September 7 blog entry. We have seen energy, metals and other natural resources sectors strengthening in the last couple of market sessions and would not be surprised, if natural resources funds continue to perform well.

Technical analysis screens are provided by 

European Stocks Continue Higher, but the Real Action is Now in Natural Resources


The Fidelity Select Materials Fund (FSDPX, last change: 1.70%) moved to its 52-high and shows a bullish price pattern. Natural resources funds across the board show similar bullish momentum, including the Fidelity Select Natural Resources Fund (FNARX, last change: 2.27%) and the Fidelity Select Energy Services Fund (FSESX, last change: 1.88%).

Technical analysis screens are provided by