This past week was very strong for U.S. Equities and it raises the question – did we hit the market bottom? That seems unlikely with high inflation, but rather than make any predictions, let us check the Bullish Percent Indicator percentages. The top data table examines seven major market indexes while the second table breaks the market into ten sectors.
Index BPI
All the major indexes show an increase in the percentage of bullish stocks with exception of the Dow Jones Transportation Average (DJTA). Several are still very close to the 30% over-sold zone. Many opportunities exist for purchasing equities or there is plenty of headroom for upward movement.
Sector BPI
Bullish Percent Indicators of specific sectors is where one might go to look for buying opportunities. While all ten Point and Figure (PnF) are bullish this week, five sectors are still over-sold.
To take advantage of over-sold sectors, I’ve been placing limit orders for sectors such as Financials, Industrial, and Materials. The idea is to hold these sectors until they show over 70% bullish stocks at which time very tight Trailing Stop Loss Orders are set in an effort to lock in profits.
In a week such as this past one, I puzzle why Energy and Industrial did not move up. I’ll check on these sectors mid-week to make sure there is not an error in the data.
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