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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Jim Battaglia who wrote (1373)	12/19/1998 7:13:00 AM
From: Bernie Kaplan	Read Replies (1) \| Respond to of 4916

The market has been locked in a relatively narrow trading range during the past three weeks, as the periodic imposition of many domestic and foreign events have produced an extremely high level of day to day volatility. Where Fidelity's Selects are concerned, the day to day shifts in short term momentum have been quite dramatic, as many sectors have been unable to produce a sustainable uptrend for more than a day or two before profit taking or political worries produce profit taking or a general retreat from equities. Despite the events in Washington and Iraq, however, the latter part of this week saw the large cap technology related sectors return to a position of dominance, and considerably more Selects are doing better than the broader market than they were a week or two ago. On a short term basis, 19 Selects are generated greater upward momentum than the S & P 500, while only 6 funds are generating negative short term momentum figures. This group is currently led by Electronics, Technology, Computers, Developing Communications, Software, Telecommunications, Utilities Growth, Business Services, and Environmental Services. Financial Services, Construction, Home Finance, Air Transportation, and Regional Banks are the next strongest group, but these funds have so far failed to break out of their flat or slightly declining trading ranges with enough persistent impetus to categorize them as viable purchase candidates. On an intermediate term basis, the top rated funds are still in the technology and telecommunications related areas. There are currently also 19 Selects generated better intermediate momentum ratings than the S & P 500, but 14 funds are still producing negative intermediate momentum ratings at this time The identical comments as above apply to the financials, where no breakout to the upside has yet to occur, despite a couple of sessions where company specific news has produced substantial positive moves. Consumer, natural resource, and energy related issues remain weak, and with the price of gold locked in a $ 290- $ 300 range, the related funds have so far failed to break to the upside through their individual resistance levels. The airlines are looking better on a short term basis, but until they can break out of the trading range that they have been in for the past six weeks, they hold little appeal except for those who enjoy holding funds for two or three days at a time. While it means little where Select Fund investors are concerned, the Dow Jones remains in a downtrend and is now 5% below its all time high. This makes sense, of course, since the most ominous fourth quarter earnings warnings have come from companies within this narrow group. The S & P is fighting to break out of a similar price pattern, and is now only a few points from establishing an all time high. The Nasdaq and the Nasdaq 100, of course, keep heading higher despite their tendency to drop violently before buyers step in and get these indexes back on their upward track. The small cap Russell 2000 continues to be a complete waste of time, and has gone virtually nowhere over the past six weeks. Its charts, unfortunately, have yet to demonstrate the type of technical patterns that would give one hope for a January rally. Questions or comments are always welcome. Have a great weekend and a wonderful Christmas !!! Bernie Kaplan flapjaw@aol.com