High Impact: U.S. Relative Sector Analysis

Trade U.S. Stocks with Unum Capital.

To get started, email lester@unum.co.za

*Note Prepared on Friday, 07 March (pre-market U.S. trading session).

Key:

Short Term (1-10 days): Highest weight

Medium Term (2-4 weeks): Medium weight

Long Term (5-8 weeks): Lowest weight

Sector Analysis:

1. Materials vs. SPY:

Short Term: High Bullish Momentum, Approaching Overbought (Strongest positive signal)

Medium Term: Strong (Positive signal)

Long Term: Weak (Negative signal)

Overall: Improving. The strong short and medium term signals outweigh the long-term weakness. This sector is showing significant positive momentum in the near term.

2. Communications vs. SPY:

Short Term: Strong (Positive signal)

Medium Term: High Bullish Momentum, Approaching Overbought (Positive signal)

Long Term: Overbought (Potential negative signal)

Overall: Potentially peaking. While short and medium terms are strong, the long-term overbought condition suggests caution. The sector is currently strong but might be due for a pullback.

3. Energy vs. SPY:

Short Term: Neutral (No clear signal)

Medium Term: Neutral (No clear signal)

Long Term: Weak (Negative signal)

Overall: Slightly deteriorating. The consistent neutral signals in the short and medium term, combined with the long-term weakness, suggest a lack of momentum and a potential downward trend.

4. Financials vs. SPY:

Short Term: Neutral (No clear signal)

Medium Term: Strong (Positive signal)

Long Term: Strong (Positive signal)

Overall: Stable and strong. Consistent strength in medium and long term, even with a neutral short term, indicates a solid underlying trend.

5. Industrials vs. SPY:

Short Term: Strong (Positive signal)

Medium Term: Strong (Positive signal)

Long Term: Neutral (No clear signal)

Overall: Improving and strong. The strong short and medium term signals, coupled with a neutral long term, suggest positive momentum and potential for further gains.

6. Technology vs. SPY:

Short Term: Weak (Negative signal)

Medium Term: Weak (Negative signal)

Long Term: Weak (Negative signal)

Overall: Consistently weak. All timeframes show weakness, indicating a clear downtrend and lack of positive catalysts.

7. Consumer Staples vs. SPY:

Short Term: High Bullish Momentum, Approaching Overbought (Strongest positive signal)

Medium Term: High Bullish Momentum, Approaching Overbought (Positive signal)

Long Term: Neutral (No clear signal)

Overall: Improving and potentially overbought. Strong short and medium term momentum suggests a bullish trend, but the overbought condition warrants caution.

8. Real Estate vs. SPY:

Short Term: Strong (Positive signal)

Medium Term: Strong (Positive signal)

Long Term: Neutral (No clear signal)

Overall: Improving and strong. Consistent strength in short and medium terms indicates positive momentum and potential for further gains.

9. Utilities vs. SPY:

Short Term: Neutral (No clear signal)

Medium Term: Neutral (No clear signal)

Long Term: Neutral (No clear signal)

Overall: Neutral and stagnant. Lack of clear signals across all timeframes suggests a lack of momentum and potential for sideways movement.

10. Healthcare vs. SPY:

Short Term: Overbought (Potential negative signal)

Medium Term: High Bullish Momentum, Approaching Overbought (Positive signal)

Long Term: Neutral (No clear signal)

Overall: Potentially peaking. Strong medium-term momentum is countered by the overbought short-term condition, suggesting a potential pullback.

11. Consumer Discretionary vs. SPY:

Short Term: High Bearish Momentum, Approaching Oversold (Strongest negative signal)

Medium Term: Weak (Negative signal)

Long Term: Neutral (No clear signal)

Overall: Deteriorating significantly. The strong negative short-term signal, combined with medium-term weakness, indicates a clear downtrend and potential for further losses.

Lester Davids

Analyst: Unum Capital