1955 – Beware the Gravel Monster.
Several days ago I posted a notice in the Forum that Technology dropped into the oversold zone. On Friday the sector dropped even further making VGT a very good buy at this point. Three other sectors are down into the 30% bullish zone so we need to keep an eye on those three this coming week.
Index BPI
All seven indexes are bearish with exception of the Dow Jones Industrial Average and it only turned bullish due to Friday’s market. Over the entire week it too move down based on the percentage of bullish stocks within the 30 stocks that make up the DJIA index. Note that the NASDAQ 100 dropped down to where only 24 stocks out of 100 are bullish.
Sector BPI
Technology is highly correlated with the NASDA 100 and it closed out this week with only 20% bullish stocks. I’ve been buying VGT for the various Sector BPI portfolios.
Pay attention to Health, Communications, and Real Estate. All reside between 30% and 40% bullish. When I see this situation there are times when I’ll place limit orders at 5% to 8% below the current price in hopes of securing shares on an inter-day dip.
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Explaining the Hypothesis of the Sector BPI Model
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It is not too late to purchase shares of VGT as Telecommunications is still oversold.
Lowell