October 2nd, 2005
The market has withstood two weeks of negative fundamental surpises and, most unexpectably, has shown sufficient resiliance to start an assault against the resistance levels mentioned previously (see Monday, September 12, 2005). Facing hurricanes Katrina and Rita, another Fed interest rate rise and weakening consumer confidence, the market, as represented by the S&P500, increased 1.11% to 1228.81. That move comprises nearly all of the gain in that index so far this year, or 1.39%.
For the past 10 years, October has produced excellent results and this year looks like it won’t be an exception. If resistance levels can be breached with conviction (1245 for the SP500, with volume) then a significant move is in the offing into year-end.
Energy sector stocks have consistently beenthe movers since the middle of last year with the various Oil&Gas Industry Groups ranking among the top of IBD’s list of 197 Industry Groups. If you’ve owned stocks in this group, they have probably continued to make list of new highs throughout the year.
But what groups appear now to be moving up significantly in the rankings? Over the past month, for example, because they may now look to be possible leaders in the near future?
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Some of these Industry Sectors have improved because select member stocks have already moved beyond their resistance levels reflecting a growing assumption that inflation will appear in such commodities as the wood, metals and mining products. After scanning all the stocks making up these 15 groups, I’ve found some excellent prospects. The momentum has begun in some stocks in these groups and can be bought now; the following have yet to break out, should be added to your watchlists and bought when those resistance levels are breached: