Potential for sector rotation out of banks and into resources

Angela Mangan

QMG Pty Ltd

Potential for sector rotation out of banks and into resources? On the 2/2/15 the uplift in the technical ratings of the resource (materials) / energy stocks and sectors commenced. WPL, STO, OSH , BHP, RIO generated buy signals in a cluster and remain rated as technical buys (BHP and STO having generated secondary buy signals this week). Over recent days the resource / energy-related stock buy signals generated have become more broadly based and extended beyond the majors. In contrast, the four major banks remain at overbought levels on momentum basis. Outright sell signals have NOT been generated, but there is reason for caution relating to the sustainability of the rally. Potential technical tops/ potential sell signals have now emerged on two bank stocks, but obviously will need to translate to actual sell signals to be significant.


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Technical Analyst
QMG Pty Ltd

Angela has over 30 years experience in the technical analysis field. She provides technical analysis coverage of major Australian and global stocks / key markets, including provision of a bespoke technical service to wholesale clients.

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