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 

Fidelity Latin America Fund is Oversold Now and Due for a Snap Back Rally

Fidelity Latin America Fund (FLATX, last change: -2.63%)

The Fidelity Latin America Fund (FLATX, last change: -2.63%) has dropped more than 19% since its February peak and is now oversold. An oversold condition occurs when the value of an investment drops too far too fast, and it is usually followed by a rebound, which is also referred to as the snap back rally. The significance of FLATX rallying from this oversold point would be that a new support level can be established, which can lead to the consolidation of the price.

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

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 

Fidelity funds to watch in 2012

The following five mutual funds were the laggards in 2011, but may become attractive investments in 2012:

  • Fidelity Select Automotive
  • Fidelity Select Brokerage & Investment
  • Fidelity International Real Estate
  • Fidelity China Region
  • Fidelity Emerging Markets

 

Mutual fund screens and buy/sell signals are provided by FidelitySignal.com 

The medical delivery sector is emerging as one of the market leaders

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 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.

Mutual fund screens and buy/sell signals are provided by FidelitySignal.com    

Sell signal: utility stocks can no longer lead the market higher

The Fidelity Select Utilities Portfolio fund (FSUTX, change: -1.14%) reached its 52-week high on November 8. It is disappointing to see that one of the leading sectors of the fall rally is breaking to lower price levels. The stock market will need to find leadership soon, otherwise the traditional holiday rally may not happen this year.

As we reported, the Fidelity Select Utilities fund (FSUTX, change: -1.14%) reached its 52-week high on November 8. It is disappointing to see now that one of the leading sectors of the fall rally is breaking to lower price levels. The stock market will need to find leadership soon, otherwise the traditional holiday rally may not happen this year.

 

Technical analysis screens and buy/sell signals are provided by FidelitySignal.com

Halloween sell-off spooks the equity markets

Most equity sectors sold off today after a strong October performance. The Fidelity Select Brokerage & Investment fund (FSLBX, change: -5.43%) was the weakest today of all the Fidelity Select funds, but still managed to hold above its trendline.

Most equity sectors sold off today after a strong October performance. The Fidelity Select Brokerage & Investment fund (FSLBX, change: -5.43%) was the weakest today of all the Fidelity Select funds, but still managed to hold above its trendline.

 

Mutual fund screens and buy/sell signals are provided by FidelitySignal.com     

Breakout: the technology and the consumer discretionary/retailing sectors are emerging as the market leaders

The beginning of the earnings season has brought about an impressive stock market rally. Improved sentiment in Europe was also helpful. The fact that all Fidelity sector funds gained today is an indicator of how broad-based the buying was.

The technology sector is providing leadership to the market, as so many times in the last 20 years, with multiple companies reporting strong earnings results. The United States is the undisputed world leader in technology innovation and companies like Google, Apple, Amazon and eBay continue to reward their shareholders with growth.

In addition to the large cap tech companies, a large number of medium and small sized companies are developing breakthrough technologies promising to make our lives more efficient, safer and more enjoyable. We will continue to keep an  eye on investment opportunities in the technology sector.

Fidelity Select Software & Comp fund (FSCSX, change: 2.10%)

Fidelity Select Software & Comp fund (FSCSX, change: 2.10%)

Consumer discretionary and retailing stocks are also responding to the increased appetite to buy equities and can provide leadership to the market in the coming weeks.

Fidelity Select Retailing fund (FSRPX, change: 1.85%)

Fidelity Select Retailing fund (FSRPX, change: 1.85%)

Mutual fund screens are provided by FidelitySignal.com    

Extraordinarily broad rally lifts financial funds today

All of the Fidelity Select sector funds closed higher today, which is indicative of how broad the stock market rally was. The Fidelity Select Financial Services fund (FIDSX) was one of the top gainers with an incredible 5.31% move. FIDSX is on the verge of breaking the recent seasonal downtrend. However, we caution investors that until FIDSX moves above its 100 day moving average, high volatility can continue.

Fidelity Select Financial Services fund (FIDSX, change: 5.31%)

Fidelity Select Financial Services fund (FIDSX, change: 5.31%)

Mutual fund screens are provided by FidelitySignal.com