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 

Retailing sector struggles to move higher

FSRPX

The Fidelity Select Retailing fund (FSRPX, last change: -0.53%) has reached its resistance level and is struggling to regain momentum. FSRPX retreated from the May highs and has under performed the S&P 500 index ever since. FSRPX started out the year with strong performance and has advanced 17.86% year-to-date. However, FSRPX has fallen behind other investment choices in the last few month. 

Technical analysis screens are provided by FidelitySignal.com

The broad-based stock market rally continues, retailers gain momentum

All Fidelity sector funds gained today, with the exception of the Fidelity Select Gold fund. The top gainer was the Fidelity Select Automotive (FSAVX, up +2.88% today) fund.

However, the sector fund with the most bullish momentum is the Fidelity Select Retailing (FSRPX, up 1.03% today) fund. FSRPX moved above its 100-day moving average today, although only with a narrow margin. We’ll be tracking this fund closely to see if retailers can provide leadership for the market.

Today’s losers were bond funds and gold. We’d like to see the current rally in stocks extend beyond the weekend before we can evaluate the potential of a change in the market trend.

A decisive move above its resistance level can turn the Fidelity Select Retailing (FSRPX, change: 1.03%) fund into a momentum leader.

A decisive move above its resistance level can turn the Fidelity Select Retailing (FSRPX, up 1.03%) fund into a momentum leader.

Mutual fund screens are provided by FidelitySignal.com