SECTOR SEARCH
Finding Sectors
In this introduction to our Sector Search blog, we will discuss the different ways to uncover specific sector performance and potential outlook throughout the equity markets. Depending on your investing style, strategy, and time availability, you may decide to invest in, or trade, sectors, rather than individual stocks.
There are many avenues in which to invest in, or trade, certain industries, or sectors, including the use of Exchange Traded Funds (ETFs), explained in our publication When to Buy and When to Sell: Combining easy Indicators, Charts and Financial Astrology (available on Amazon). Many beginning investors prefer to start with ETFs, as they are generally less volatile and less susceptible to earnings reports, bad news, and insider ownership. These instruments are the simplest ways to invest in a specific industry, as they are made of up several companies within a sector, rather than just one.
Some sectors are interest rate sensitive, such as real estate, commodities, bonds, currencies (including Crypto), technology, globally traded entities, and to some extent financials. Others are more economically/inflation driven, like energy, retail, defense, consumer staples (necessities) and discretionary (luxuries), utilities, etc…
There are various ways to research stock sectors, including sources like Investor Business Daily (IBD), also discussed in our publication, and many financial sites online including Yahoo, BarChart, StockFetcher, and Finviz, to name a few.
Sector “rotation” is a common strategy that many professionals utilize based on seasonality, interest rate changes, earnings, perception of change, and cycles. This strategy can be beneficial to those highly in tune with the markets, and familiar with these time events.
Astrologically, there are also signifiers that suggest better times to be aware of potential investment opportunity in an industry or sector. Planet transits and aspects, in zodiac signs (also noted in Chapter 4 of our publication), often symbolize, or “rule” different industries based on positioning in the sky, comparable to cycles and repeated patterns in the market.
The best example of this is the planet Jupiter, which tends to heavily effect certain sectors related to the sign in which the planet is positioned (please see our Planet Power - Jupiter Effect blog, dated 3-27-24), as it expands energies and has a positive connotation.
It is important to identify strong sectors at any given time in the financial markets. Sector strength (strong or weak) tends to lead to longer lasting trends, giving the inexperienced individual more time to respond. Sector strength can also assist in identifying the best, or worst, stocks within a sector. There are two ways to potentially choose a stock to invest in, or trade, using sector strength:
One is to simply select the strongest stocks in the strongest sectors to invest in, or trade, in a bullish manner, or vice-versa. Also, make sure the stock is not “over-extended,” or “over-bought” (“over-sold” in down-trending conditions), and has above average volume, as also covered in our publication.
The other is a little less obvious. The strongest stock in a weak sector, or the weakest stock in a strong sector, may also be worth putting on your “watchlist” for a near future trade. The premise behind this strategy suggests that these types of stocks may be the first to reverse price action, when the sector starts to even out, or change direction. This is a potential opportunity to get ahead of the trade before the actual change in direction. Be careful, of course, to set your entry price at least 1 to 2% ahead of the current price, in the expected direction, in case the timing is off, to prevent entry is the current trend continues. Also follow all other “rules” discussed including risk management.
Please stay tuned for future “Sector Search” blogs, as well as other related blogs that include favorable industries to focus on during specific economic and astrological conditions.
