Power Sector Review

March 07, 2022

With the Macro view of the markets still in this backtest mode and major indexes holding above the lows going into the week, but that is in no way suggesting there is great strength. Determination maybe, and that can work in many case, there is a lot of pressure with so much headline risk.  Growth is still having a hard time getting any footing having strong moves off the low that can’t even make it 1-3 days before getting sold into. However, from a sector standpoint, there are very strong spots in the market driven by all the current worries and they continue to work. Many have had good runs and leading names are extended, but often there are quite a few catch plays as institutions and investors search deeper into the mix. That is exactly what our site is designed to help filter out.  Below are each of the sector segments broken out if you are looking for a targeted area.

Chart Highlights

The Moving Average Breadth quickview shows how bifurcated the markets really are with Energy, Utilities and Materials leading by far; and Consumer Discretionary, Information Technology, Communication Services are the biggest drags. Consumer Staples, Industrials and now Healthcare (with the exception of Biotechnology if you can even do that) are hanging out in the middle still trying to find a direction to tag along with it seems.

As we mentioned in the start, what is working could continue to work for a while and has room on most momentum measures to continue higher as a sector even if there is internal rotation in the names that are leading. Most of what we cover in the video is the strong spaces and spots still reasonable to look at participating. Then based on the highlights below I decided to throw in Real Estate and Health Care as they both have subsectors starting to show a change in character.

Below I wanted to highlight the sectors this week that made the biggest 5 day RS gains and loses.  We covered most of the gainers in the video with the exception of the Discretionary plays.  The losers show ares that really been beat up recently with financials dominating this list with a heap of Consumer Discretionary as well. Keeping it real visual, look for red to orange to yellow turning green in the RS columns to find some of the best opportunities.

The video will take you through our move down into the sectors that are moving and look at many of the setups based on our 4 pillars of relative strength. All of this post is for educational purposes only and does not constitute a recommendation to do anything but look at a chart and review it more. Please see our full disclosure link in the footer of the site.

As always, I hope this helps!