Sometimes when the markets seem to be a critical juncture I like to look over my sector charts to gauge whether there is hidden strength or weakness. What I found is that the majority of charts remain strong and are just working off an overbought condition over the last 2 weeks. Three sectors that have very bullish RSI action, meaning it moved quite a bit above 70, and has pulled back mildly are below. I’m not saying these are buys now, but I expect all of these to get back to previous highs as it’s rare to see a stock or index to make a move to 80 and just roll over and die.

I’ve even included stocks I like in each of the sectors if you want to dig a little deeper, at least you’ll have somewhere to start.



One Response to “Three Sectors That Have More Upside”

  1. Hypnos Says:

    While housing and financials have been leading a market-wide uptrend, I think we could easily see continued weakness due to the lower high at the end of the September. Watch out if they break below the mid-September price support.

    I certainly agree about precious metals — sound consolidation pattern with a strong fundamental story behind it.

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