Saturday, December 27, 2008

Sector Update for December 27th

Last week's sector review found that most sectors were in a neutral trending mode, with financial shares weakest and health care issues strongest in relative terms. As of Friday's close, here's how the Technical Strength readings look:

MATERIALS: -300 (36%)
INDUSTRIAL: -200 (66%)
ENERGY: -100 (20%)
HEALTH CARE: +180 (73%)
FINANCIAL: -380 (33%)
TECHNOLOGY: -200 (49%)

The sectors, as a whole, are displaying a modest downtrend, with materials shares responding to commodity weakness and financial issues particularly weak. Technology and industrial stocks are weaker than they were last week; interestingly, energy shares have held up relatively well despite weakness in the price of crude oil over the past week.

The percentages of stocks within the sectors that closed on Friday above their 20-day moving averages are in parentheses, as reported by the excellent Decision Point site. This gives us a somewhat longer-term look at sector strength and weakness. Clearly, the commodity weakness is weighing on the energy and materials sectors; financials are also quite weak. Health care shares, somewhat recession resistant, continue to lead the pack.

Thus far, the sector readings are consistent with the range bound market conditions we've seen over the past several weeks. Active traders: note that I update trend numbers each morning before trading days via the Twitter app; subscription is free.