August 10th, 2008

Technology Industry Groups Advance in Rank

I haven’t discussed and am somewhat hesitant doing so now, Industry Groups that advancing in rank. My concern is appearing to have boarded the “we-have-hit-the-bottom” bandwagon. I don’t think we have, we’re far from it and, when we do, it will take some time before we see a major, sustained move up. But accepting the risk, this weeks rankings show some interesting movement that I’d like to share in case you’re seeking some short run trading opportunities. Understand, the market trumps industry group. Until the Market Timing Indicator flashes a clear green light, you may soon look to cash in as the market again turns south.

But something significant has happened. Twenty-four of the 197 IBD Industry Groups moved up more than 80 positions in the ranking and nearly half were computer software and hardware related. Furthermore, these groups are now among the top 50 Industry Groups. With those caveats, here are the Industry Groups that have increase 50 positions or more in rankings:

The rankings are highly dependent on relative strength (movement relative to the S&P 500) so, as on a second cautionary note, it should be pointed out that these jumps may may be more reflective of weakness throughout the market than underlying fundamental strength in tech related industries.

These groups include around 265 different stocks but, I have to say, they represent a motley crew. I looked at all the stocks and it was difficult picking any that had charts that meet any of my criteria: approaching new highs, building a base, etc. Almost all of them look like they have a huge headwind in the form of an overhang of supply to absorb before being able to advance.

Having said that, here are some stocks in these groups that you might want to consider. The Security Software firms seem to be the best poised to continue advancing:

  • ECLP (Eclipsys)
  • JNPR (Juniper)
  • ANSS (Ansys)
  • PMTC (Parametric)
  • DASTY (Dessault)
  • MFE (McAfee)
  • CHKP (Checkpoint)
  • SYMC (Symantec)
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