Understanding Sector Rotation: Technical Analysis Primer
For more sophisticated investors, there are a number of proprietary models that are designed to determine what stage of the investment cycle we're in -- and help allocate a portfolio accordingly. Generally speaking, though, these models are either incredibly expensive to license or incredibly complex to implement. As such, they're generally relegated to professionals. For most technicians, the first two methods offer a much more accessible way to employ asset class rotation, often with better results.
While "sector rotation" is a common phrase on and off Wall Street, implementing it effectively requires a bit of uncommon knowledge. Now you should be set to allocate your portfolio in line with sectors or asset classes exhibiting strength -- and be aware of which are likely to be next in line for a move higher.
Next time, we'll add to your technical repertoire with another primer that will bring you closer to implementing technical analysis for your portfolio.
In the meantime, do you have a burning technical analysis question? Get it answered by heading to Stockpickr Answers.-- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV