Sunday, July 1, 2012

What sectors to Invest right now? Industry analysis


Industry Analysis: Sector Rotation:

The S&Pindex is a good indicator of the economy in the world, indeed most of the companies within the S&P are multinationals with branches all around the word.  We can see on the S&P chart that after having reached a peak at 1400 (highest value since January 2008), the index is slightly dropping even though the long term trend remain positive and no breakthrough have been noticed within the two channels.  The drop in the index is  probably due to seasonal effect such as the “January effect” (investor selling stock at the end of year and buying it back in January for tax purposes), moreover we can see that year after year, the same downward trend happen after the first quarter of the year.
There is no clear signal from the 100 and 200 days moving average, but the slow stochasticindicator shows that the index is overbought and is now starting to drop, moreover the debt crisis in Europe seems to spread.
(Click on the image to enlarge it)









Jim Cramer’s chart:
 
According to Jim Cramer’s Chart we could say that we are in the mid to late bull market sectors, therefore the financial and technological sector will start to fade, indeed if we look at the performance of the S&P index since the beginning of this year, it has grown constantly so we can consider that the early bull period has started at the end of last year and is now coming  to its end has a downward trend have been noticed.
Our investment recommendations would be the industrials, energy and telecom sectors according to Jim’s carter theory but we should keep in mind that severe consequences could spread from the Euro-Zone if EU doesn't find a fast and reliable solution to stop the spread of the debt-crisis, indeed if countries such as France couldnt pay its debts it would be a disaster to entire economy.

3 comments:

click this said...

Choosing right sector for investment is too hard these days. Everybody who wants to invest their money is so confused. I think this post will a little bit helpful for those type of people.

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