The Watch-List for the week of 06-12-2017 targets several stocks exhibiting relative strength, as investors rotate from growth to value.
Using a top down approach, starting with markets, then sectors and industry groups, we will focus on high probability setups as the week unfolds. We will look for setups in sectors and industry groups that fit our criteria. If the markets are bullish, look to financials and the industry groups therein, as most look similar.
A large part of the value stock universe is comprised of banks, asset managers, investment services and insurance. This makes up the bulk of XLF, the S&P500 SPDR Financials. Real estate (IYR) is bullish as well.
Financials are bullish.
We found many of the banks noteworthy as candidates. The top three IBD ranked banks are in varying states of breaking out. BAC is the last to go full on bullish and stands at #2 in the industry group. Earnings have been good.
Compare the Bank of America chart below with Morgan Stanley (IBD Rank #1) and Citigroup (IBD Rank #3) and you can see what we are anticipating. Use the TD Setup for entry, as BAC will likely experience bullish follow through from last week, once the markets find their feet.
Watch-List 06-12-2017
Banks, insurance, investment services, asset managers show potential.
Enjoy your day,
Vinny