![]() ![]() The table below shows the top-rated sectors using the criteria explained above. The sentiment part of the score considers broker buy/sell recommendations from Zacks Investment Research and short interest. The price action piece of the rating looks back one year, and considers the average return of the stocks and the percentage of them that have beaten the S&P 500 Index (SPX). ![]() I created a sector ranking system that considers price action of stocks within a sector, and the sentiment on those stocks. We have about 1,200 stocks broken down into 40 sectors. Similarly, we're bearish on stocks that have underperformed yet are loved by investors. As they capitulate, that sideline money turns into buying power pushing the stock higher. As a stock outperforms, it starts to become clear for the bears that they have it all wrong. The pessimism is an indicator of sideline money. For those unfamiliar with our contrarian approach, we look for stocks which have performed well but are despised by investors. This week I'm going to do a basic sector analysis using our contrarian philosophy. ![]()
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