Sunday, May 5, 2013

Sector & Group Rotation Notes – 5/5/13


Listed below are notes from the author's weekly analysis.

The Sector Trends blog does not make forecasts and does not cheerlead with its commentary. The perspective offered is on current trends in the market, which sectors and groups are rotating, and which stocks from these groups are likely to perform best in a neutral/positive environment. Readers need to provide their own assessment of market health, employ their own risk management strategies, and trade accordingly. In a declining market nearly all equities will suffer, including those found listed here. 

All data and charts displayed here are the property of MarketSmith, and are published here with their permission.

Market Overview:
The table below shows price performance for key markets and sectors over the trailing 26 weeks, and is sorted high to low by 5 week performance. The green and red shading denotes relative performance +/- to the SP 500 for the time period in question.

Index
1 Week Gain
2 Week Gain
3 Week Gain
5  Week Gain
13 Week Gain
26 Week Gain
Philadelphia Utility Index
-0.3%
0.2%
1.3%
4.4%
11.6%
12.0%
Pboe Oil Service Index
3.9%
8.3%
2.6%
4.2%
2.1%
18.7%
Philadelphia Housing Index
2.7%
10.8%
5.4%
3.7%
5.7%
20.4%
Nasdaq Composite
3.0%
5.4%
2.5%
3.4%
6.3%
13.3%
Philadelphia Semiconductor Index
2.5%
8.1%
4.0%
3.3%
7.2%
21.1%
SP 500
2.0%
3.8%
1.6%
2.9%
6.7%
14.2%
DJIA
1.8%
2.9%
0.7%
2.7%
6.9%
14.4%
KBW Large Cap Bank Index
0.6%
3.8%
1.3%
1.2%
4.0%
13.7%
Russell 2000
2.0%
4.6%
1.2%
0.3%
4.7%
17.2%
Russell 1000 Energy Index
2.9%
6.2%
1.8%
0.2%
1.4%
10.3%
Cboe Technology Index
5.3%
8.4%
1.8%
-0.3%
2.8%
2.7%
Dow Jones Transportation Index
1.7%
3.1%
1.2%
-0.6%
6.2%
21.7%
Philadelphia Gold/Silver Index
1.3%
4.6%
-7.5%
-20.7%
-29.1%
-39.8%

The Markets pushed higher last week with the DJIA, S&P 500, and Russell 2000 closing at new all time highs. The Nasdaq closed at a new post-2000 bubble high. Friday's employment data sparked Friday's move higher, and Friday's action accounted for more than half of the weekly gain for the S&P 500, DJIA and Russell 2000.

Group Themes:
The tables below show commodity, technology and defensively related group's price performance over the trailing 1, 2, 3, 5, 13 and 26 week periods.

30 Commodity Oriented Groups:
1 wk
2 wk
3 wk
5 wk
13 wk
26 wk
# in the top 50 groups (out of 197)
11
12
6
2
3
5
# in the bottom 50 groups (out of 197)
5
4
8
14
14
12

28 Technology Oriented Groups:
1 wk
2 wk
3 wk
5 wk
13 wk
26 wk
# in the top 50 groups (out of 197)
13
15
5
4
3
5
# in the bottom 50 groups (out of 197)
4
3
5
10
10
10

30 Defensively Oriented Groups:
1 wk
2 wk
3 wk
5 wk
13 wk
26 wk
# in the top 50 groups (out of 197)
4
2
5
9
14
8
# in the bottom 50 groups (out of 197)
17
19
10
2
0
3

Defensive groups performed poorly while tech groups, and to a lesser extent commodity oriented groups performed well suggesting healthy market internals.

Industry Group Performance:

Internet: Last week the blog pointed out the positive reactions to earnings releases companies from the Internet-Content group (G3334) have been receiving. The table below lists the companies from the group that released earnings last week and their weekly percentage price gains. With the exception of LinkedIn which suffered from disappointing guidance all of the companies prospered. This uniformity of movement suggest the positive price action will continue, and also suggests a positive bias towards how investors are interpreting earnings results from companies in this group.
Symbol
Name
RS
EPS
Up/Down Vol
Weekly % Gain
YELP
Yelp Inc Cl A
79
45
1.2
22.3%
BCOR
Blucora Inc
41
71
0.7
20.1%
RATE
Bankrate Inc
23
5
1.4
16.7%
TRLA
Trulia Inc
84
29
1.1
16.3%
FB
Facebook Inc Cl A
23
88
1.1
5.4%
IACI
I A C/Interactivecorp
35
84
0.9
4.6%
LNKD
Linkedin Corp Class A
97
99
1.2
-6.5%

The table below lists companies from the group releasing results next week:

Symbol
Name
EPS Due Date
RS Rating
EPS Rating
Up/Down Vol
Days Vol Short Current
Current Price
Z
Zillow Inc Cl A
05-07-2013
96
27
1.5
7.6
60.67
AOL
A O L Inc
05-08-2013
93
68
1.2
4.5
40.34
TRIP
TripAdvisor Inc
05-07-2013
91
95
1.3
5.6
55.30
BITA
Bitauto Hldgs Ltd Ads
05-09-2013
98
72
1.4
1.0
11.44
LEDR
Market Leader Inc
05-09-2013
96
50
1.6
6.8
9.54
WBMD
Webmd Health Corp
05-07-2013
95
8
2.2
4.4
25.12
SFUN
Soufun Hldgs Ltd Ads A
05-08-2013
91
99
1.0
8.0
25.04
XOXO
X O Group Inc
05-09-2013
86
75
2.2
6.8
11.55
DMD
Demand Media Inc
05-07-2013
21
99
0.7
9.0
8.38
LOCM
Local Corp
05-09-2013
8
21
1.1
19.3
1.65

Webmd (WBMD) is seeing heavy accumulation with an accumulation/distribution rank of "A-" and a 50 day up/down volume ratio of 2.2. Over the last reported quarter institutional sponsorship increased 10% from 170 to 187 funds. This weekly chart looks very interesting...


The Internet-Network Solutions group (G3586) is beginning to show some flickers of improving price performance. Rackspace Hosting (RAX) reports on Wednesday AMC, and a positive surprise could ignite interest in the group.

Energy: Last week the blog discussed the Oil&Gas-Refining/Mktg group (G2900), and how reaction to  the high number of earnings releases would yield insight into the future performance of the group. The group gained only 0.8% on the week to rank #153 on the trailing 1 week price performance list. This action suggests waning investor interest in the group, and that it will likely begin to fall in the industry group rankings.

Other groups in the sector performed well however, with 6 groups ranking in the top 50 of the trailing 1 week price performance list: Energy-Solar +7.7% (#1), Oil&Gas-Field Services +6.8% (#3), Oil&Gas-Machinery/Equip +5.1% (#12), Oil&Gas-Drilling +4.6% (#14), Energy-Coal +4.4% (#19), and Oil&Gas-Intl Expl&Prod +3.3% (#42).

Chart Industries (GTLS) gained 12.3% last week to move 3% past its pivot out of a 6 week flat base. After finishing its low for the day on Friday, GTLS might pull back closer to the pivot next week.
 

Forum Energy Technology (FET) is a recent IPO seeing accumulation. Accumulation/Distribution rank of "B+", a 50 day up/down volume ratio of 1.7, and steady institutional sponsorship increases.  FET has a 29.19 pivot out of a 5 week flat base. Weekly chart:


Follow Up: 

Infoblox (BLOX) was highlighted in last week's analysis and gained 7% on the week to move 4% past its 22.96 pivot. BLOX still looks good here, weekly chart below:


Bankrate (RATE) was also covered in last week's analysis and gained 16.7% for the week. RATE may consolidate a bit, but is probably headed to the $19-$20 range. Weekly chart:


Workday (WDAY) has been highlighted here in previous weeks, and more recently in the blog's twitter feed. WDAY is seeing very strong accumulation with an "A" accumulation/distribution ranking, a 50 day up/down volume ratio of 2.7 and a 25 day ratio of 3.5. WDAY now has a 65.00 pivot out of an 8 week consolidation. Weekly chart:





No comments:

Post a Comment