The monthly S&P500 Emini futures candlestick chart has not had a pullback in 14 months. This has...
The 2 Best Sectors for Spring
03/28/2011 9:30 am EST
Energy and health care are two sectors that perform historically well each spring, says John Person, who will regard any pullbacks in these areas as good buying opportunities.
Seasonality trading is very popular these days, but there may be some sectors or areas you may not have considered trading seasonally. Our guest today is John Person, an expert in that area, so John talk about some of the sectors we may not have thought about seasonality trading in.
Well certainly energy complex, crude oil, refineries, they begin their strong seasonal tendencies in early February lasting into on or about the end of August.
I think that no market goes straight up, and we’ve seen a strong advancement in most of the refiners, especially Occidental (OXY), you look at Exxon (XOM), you look at Murphy Oil (MUR), all these stocks have had tremendous increases since say the elections of November 2010.
If there is any weakness between March into April, that time period, you get a setback in the market, I think investors should be looking for picking spots to continue to be on the long side of that sector.
Another area that we like that we enter into a strong seasonal time period, believe it or not, is in the health care sector, looking at certain stocks, and looking at the S&P different markets.
I think that if we can look at not just health care or drug stocks, but look at health care providers and start looking for a pullback in that sector as well. I think investors will find some really nice opportunities that can head into mid July, early August.
Now with oil it makes sense going into summer prices usually rise, but what is it about the health care stocks that make them a seasonal trade. What is it about this time of year that makes them rise?
Yeah, you know, with the health care providers, I think a lot of people are focused on so many other different sectors, it’s the one sector that our population has begun to become more aged. You see a lot of people start to begin to travel. They’re starting to look at new—just like with housing—people see an increase in housing, if you buy a home in April, in May, and I think people are starting to look at facilities for elderly, and in that time period you’re starting to see a bid or demand and a pickup.
If you look at real estate investment trusts, there are certain areas, especially in the health care sector—that’s a really strong building boom right now—so I think that’s a target area that we want to look for, because let’s face it we’re getting older, we’re healthier as we get older, and if we need a little bit more of managed care as we get older, these living facilities they’re in strong demand right now.
Related Articles on STRATEGIES
Matthew Kerkhoff, options expert and editor of Dow Theory Letters, continues his 14-part educational...
Profit from a market by capturing a trend. Money management is key. The battle is often from within,...
Has Mr. Market (S&P 500/Equities) priced into too much positivity, while inflation remains at ba...