Sector Rotation March 2021

Recent market sector rotation coming out of the COVID crash has confirmed Sector Rotation theory. I made this video to give viewers a brief introduction to the theory and provide some actionable investing ideas based on what Sector Rotation suggests will be the next stocks to potentially outperform.

Sector Rotation theory suggests that from market bottoms the two sectors that should lead are Consumer Discretionary and Technology. These two sectors did in fact lead the market out of the COVID crash. The next sectors to lead as the market matures are Industrials and Materials. These too followed the theory through 2020 as the bull market grew. At the market top Energy is supposed to lead and sure enough we have seen quite the run on Energy related stocks. What that means going forward if the theory holds is that Consumer Staples and Healthcare should outperform the market.
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Twitter: @noroktrade


Thank You!! This was very much appreciated and great for a newbie like me. First person to explain sector rotation in an understandable way.
100 coins
norok jen41613
@jen41613, Thanks for the tip!
You're so calm and collected. I appreciate your "dont chase" approach.
+1 Reply
Great video!
Just watched this weekend (saturday) trying to figure out what the heck happened to the nasdaq past two weeks. I really like your calm matter-of-fact education. Simple, helpful and very useful. THANK YOU FOR THE VIDEO!
@norok great content, thank you. I understand your explanation of the market situation, but isn't it maybe a good opportunity to buy tech stocks cheaper after the correction has finished?
norok SalviG
@SalviG, The theory does not say that tech will necessarily go down. The theory is just that they will underperform the market as a whole as well as other sectors. So it's more a question of what is the best place to put your money into at this present point. if you have a long-term horizon and you want to own these tech stocks off their highs then this would be the opportunity but for the next months and quarters if the cycle holds true other sectors will perform better.
SalviG norok
@norok, thank you very much for your explanation, makes sense.
I just red an article in Barron's about tech stocks, where an analyst recommends to buy the dips in tech stocks, so i was asking myself whether it is a good idea. Here an extract, would be curious about your opinion:

Investors should use the current market weakness to ensure that Apple AAPL, Microsoft MSFT, DocuSign DOCU, Zscaler ZS, Palo Alto PANW, SailPoint SAIL, and Nuance NUAN are included in their portfolios, Ives advised.

Across the wider sector, Wedbush predicts that tech stocks will move at least 25% upward in the next year. That will be driven by big names Facebook FB, Amazon AMZN, Apple, Netflix NFLX, and Google, owned by Alphabet GOOGL, as well as cloud and cybersecurity stocks, despite the recent selloff, Ives said.

More broadly, Ives said that Uber UBER and Lyft LYFT — “disruptive tech recovery names” — remain Wedbush’s favorite “reopening plays,” with profitability on the horizon and a massive surge in food delivery.
norok SalviG
@SalviG, everyone has their opinions. That is the opinion of that particular analyst and the ones that I post on here are my opinions. There's no way to know what will be "right". After you've taken in everyone else's opinions the only opinion that matters... is YOURS
SalviG norok
@norok, of course that's true. I prefer to play it safe and hold on to my value stocks and my liquidity these days. ;)
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