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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: sanke who wrote (22205)	7/6/1999 3:08:00 PM
From: Tammy DeRosier	Read Replies (2) \| Respond to of 34811

Sanke, When dealing with sector mutual funds, always use the underlying stock bullish percents to measure risk for the group, as you would for a particular stock. At present, 50% of the health care stocks are on buy signals and the indicator is in Bull Confirmed status. This is good field position. The 94% level for the health care mutual fund sector is not a relative strength number. This number reflects that 94% of the health care funds a currently on buy signals. As you might suspect, funds within a particular mutual fund group have a higher correlation of price movement than in stocks. High levels in a mutual fund bullish percent do not alarm us provided the underlying stock bullish percent is not reversing down from above 70%. Just as with stock bullish percents, we watch for column reversals. The mutual fund bullish percent for Health Care reversed up into Bull Alert status on 6/28 to a level of 24%. This was the first bullish signal we had seen from the group since 5/24. It was the column reversal of the mutual fund bullish percent into X's that provided the action point to invest in this mutual fund group. The Janus fund we mentioned in the report is an example of a strong relative strength fund in that group. The fund is up 8% from the buy signal generated last week. The fact that the fund is trading above the top of the ten week trading band does not mean it is disqualified as a viable buy candidate. Trading bands are just one of the technical attributes we look at. If the fund is at the top of the trading band and that is the only negative in the technical picture, then the odds are still in our favor. As a general rule, when a stock or mutual fund is trading at or above the top of the ten week trading band, it suggest buying on a pullback. Other members of the group are posting buy signals from below the middle of the ten week trading band. Take a look a Invesco Health Sciences (FHLSX) as a example of what to buy today. It is important to look at the core holdings of a mutual fund. For instance, in FHLSX, 8 of the 10 core stocks are drug stocks. So not only will you want to look at the Health Care bullish percent, which is positive, but you will also want to look at the Drug bullish percent which is in Bull Confirmed status at a level of 54%. Asian and Pac Rim mutual funds have had a strong run since the first quarter of 1999. Most of these funds are at or above the top of their ten week trading bands. This group carries more risk than the health care group due to the 84% level in the stock bullish percent for Asia Pacific.