Trading the Right Stocks at the End of 2013

You have only one month left to pad your 2013 returns.

So I have to ask…

Are you trading the right stocks?

As the market enters the home stretch, the sentiment picture is little changed. Investors are beginning to come around to the idea that equities might not be such a terrible investment idea. But most remain skeptical– and that’s good news for the market.

“Blind contrarians are a good thing for trends. Every trend needs doubters and skeptics – otherwise there won’t be anyone left to buy,” explains Ivanhoff Capital founder Ivaylo Ivanhoff. “Will we see another round of performance chasing in the last month of the year? Most of the momentum leaders from the first 3 quarters experienced sizable corrections in Q4. The best performers since October have been breakouts from several month long ranges. This is not a sign of froth. The fear of missing out is not that much bigger than the fear of losing. The market has been very level-headed and it has constantly corrected through sector rotations and pullbacks to major moving averages.”

With many of the year’s best momentum names weakening, it’s time to update your watch list…

9 Major Stock Sectors (11/25/13 - 12/02/13)

Cyclicals and technology stocks are the past week’s standouts. But investors are looking to sell energy and staples stocks (which had, until recently, outperformed the averages). Adjust your focus and get ready for one last push higher once stocks finish consolidating. And of course, be ready for anything and everything…

“At the end of the day, we can talk as much as we’d like about what’s ‘probably going to happen’ in stocks,” says my trading buddy Jonas Elmerraji. “But remember, we only trade on technicals. As long as the uptrend remains intact (and it is still), we’re going to remain on the long side of stocks.”

Regards,

Greg Guenthner
for The Rude Awakening

P.S. Today I gave readers of my free Rude Awakening email edition a chance to learn how to get consistent double-digit gains and drive thousands of dollars into their retirement accounts in just 21 days. It’s a simple strategy that anyone can use, regardless of whether you’re an investment whiz or a humble novice. These types of opportunities are packed into ever single Rude Awakening issue, so if you’re not getting it, you could be missing out. To ensure that doesn’t happen again, sign up for FREE, right here.

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