Trading signal occurs in SELECT model portfolio: Sell FDFAX, Buy FSNGX.
Stocks went mostly higher this week carried by high momentum while technology sector was weighed down by the poor earning reports. For the week S&P 500 index closed at 2091, up 0.52%, Dow Jones Industrial Average gained 0.59% and the technology laden NASDAQ composite index decreased 0.65%.
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| Weekly chart of S&P500 index |
S&P 500 index briefly went over the round number resistance of 2100 and settled down on 2091. The 2100 looks to be a very strong resistance as the index failed to stay above this level last time in November and plunged greatly afterwards. With the help of high momentum, it is likely that the index can stay above this level and keep the rally going. As discussed last week, this rally also makes traders to take on more risk and causes the sector rotation. In the SELECT and sETF ranking tables, we have observed that the defensive sector funds falling out of favor and energy sector funds taking leadership. This week, a trading signal was issued in the SELECT model portfolio to sell consumer staple fund, FDFAX, and buy into natural gas fund, FSNGX. The sETF model portfolio may follow suit next week.
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