Best Stocks by Sector

Not all stocks are suffering. In fact, many groups are ramping.

Today I’ll cover the best stocks by sector.

Last week, I told you how market clouds are fading. While, it isn’t a popular stance, when looking at cold hard data – under the surface of the market, it isn’t all death and despair.

I had an opportunity to talk to a macro manager yesterday. We discussed inflation, interest rates, the Russian/Ukraine conflict, market history, energy prices, the consumer, and a lot more. The clear takeaway was how interesting the investing landscape is right now.

From the 30,000-foot view, the stock market confuses many. But, as I’ll show you today, looking at data shows clear patterns…many of which can be profitable, too.

Let’s get to it. Chances are there’s a nugget or 2 for you.

Stocks See Less Selling in February 2022

Back in January, we saw a massive selloff. It was the biggest stock and ETF selling since the pandemic lows.

Below, you can see that most of the selloff in January was concentrated in small-caps:

Also, it’s clear that larger caps of $50B+ suffered less. But that was then. Now, look at how February is shaking out. In a complete flipflop, small-caps are finding the juice will larger caps attract more sellers:

And you can clearly see how month-to-date, buyers outnumber sellers. On balance, that’s way more constructive than January’s action. Let’s now take a quick glance at the daily action.

When there’s a big tug-of-war, rotations are the name of the game. That’s a fancy way of saying that some sectors are getting sold, while others are flying higher. Below, the daily buys and sells of stocks shows this push and pull under the surface:

And this is where opportunity comes into play. You see those blue bars above? Those are actual stocks getting Big Money love. This is where the fun starts – follow along!

Best Stocks by Sector

Last week, I profiled 4 groups that were seeing a lot of green. Today I’m going to lean into that message and showcase the best stocks by sector.

And when I say best stocks by sector, that means each of these stocks are rising with my favorite indicator: Big Money buying. And for those of you who are curious how I’m finding all of these stocks, they’re available in our portal for platinum members.

There are 5 sectors with notable buying.

Alright, let’s start with the discretionary sector. Last week I noted the green I saw. Travel and leisure names are dominating the buys. Look:

And one of the best stocks leading the charge is Expedia Group (EXPE). This name is a magnet for JUICE:

Disclosure: Luke holds long positions in EXPE in personal and managed accounts.

Plenty of other travel related names have the same profile. Clearly smart investors are looking forward to a post COVID-19 world, full of travel.

Up next, let’s check out Energy. As oil rages higher, this group is thriving:

The energy sector has been on fire in 2022. And one name inside those blue bars above is Schlumberger (SLB). The amount of green tells the story:

Big Money is what drives stock prices. SLB and many energy stocks have been riding a monster wave of buyers. Let’s keep going!

Last week I went over the Industrial space. You can see the buyers are still there:

This is interesting because many of the stocks getting bought are containership companies. I discuss this in my market recap video from last week. Basically, I believe the Canadian trucker blockade has caused more supply constrain issues. Thus, containerships can be an alternative for the supply bottleneck.

Star Bulk Carriers (SBLK) is one of those stocks ramping:

By now, you can see why I suggested market clouds were fading. There are sectors with opportunity. Let’s keep going.

Health care stocks have slowly started flipping from sellers to buyers. Check it out:

And in a world with a lot of macro uncertainty, big cash flow rich companies are a strong investment choice. Especially those with a big juicy dividend. AbbVie (ABBV) has been leading the charge:

Disclosure: Luke holds long positions in ABBV in personal and managed accounts.

That is a wall of Big Money buying! Investors are choosing quality in 2022.

Lastly, the Materials sector has been a top sector. This makes sense given the inflationary environment, allowing companies to sell agricultural products for higher prices:

And Huntsman (HUN) has been a bellwether name for months:

That’s a wicked ramp. And there are quite a few names in the sector with similar buy signals.

Let’s tie this all together.

Here’s the bottom line: In 2022, the investing landscape has been tough to navigate. Popular growth areas have been slammed, setting the stage for other areas to thrive. From the MAPsignals viewpoint, there are 5 areas booming right now.

And by outlining the best stocks by sector, hopefully you’ll agree that it’s not all doom and gloom in 2022. Data removes emotion and reveals opportunity.

For now, focus there.

***And speaking of opportunity, check out Jason’s latest video: Best ETFs to Buy Now for March 2022. He’s always looking for great setups in this volatile tape. It’s a good one!

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