It is a stalemate | stockbee

10/04/2012

It is a stalemate

Market is stuck in a narrow range post a pullback. The selling follow through has been weak. Every time sellers attempt to take down the market buyers step in. Net result is a stalemate at this stage. A catalyst can change that equation.

In this market for many months pullback buying has worked and buyers are conditioned to do same. With less than 2.5% pullback on the indexes, it is still an appealing pullback setup.

Under the hood there is lot of sector rotation happening. The Energy sector has clearly lost its mojo. Number of stocks in that sector are reversing from their recent rally. This is in line with the sharp reversal in oil prices in recent days. Semiconductor is another sector which has been in downtrend.

On the positive side sectors gaining momentum are : hospitals, silver, long term care, home improvement stores, biotech, resorts and casinos.

The banking sector had lot of banks attracting buy interest in recent weeks. Banks like C, WFC, sti, and likes had buying interest yesterday. JPM is one good setup in that sector. The stock looks ready to breakout.




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