Sector Rotation

The stock market changes all the time with money rotating into investments representing different sectors of the economy. Sectors can lead the market for prolonged periods of time, providing attractive opportunities for investors:

We provide independent technical research and fund ratings that make it easier to trade the sector rotation of the stock market. Our exclusive SectorTRACKTM technology aims to find the best investment ideas.

Last updated on Mon, Oct 18 2021, 22:27 EDT.

What to Buy Next

Our daily report provides a concise summary of investment opportunities for Fidelity sector fund investors. We cover the following topics:

Sector Selector

Sector Exposure Does Matter

The specific sectors that you are invested in can have a significant impact on the overall return of your portfolio.

In the last five years, the performance differential between the best and the worst sector funds has averaged 73% and ranged from 60% to 105%. Each year the leaders and the laggards tend to be different and they can even change throughout the year due to the rotation of sectors.

Go to our momentum screen for the complete rankings of all 40 Fidelity sector funds. We also provide our assessment of their long-term trends based on a technical analysis perspective:

Momentum Screen

Invest in Leading Sectors

Our fund rating system can help you find new trends and can warn about declining investments.

Fund Ratings

Invest in Bullish Trends

EXAMPLE: The Fidelity Select Natural Gas Fund (FSNGX) was last upgraded to BUY rating on 2021-10-01 and gained 5.41% since then, assuming reinvested dividends and distributions. In comparison, the benchmark Fidelity Fund () returned % in the same period.

Avoid Weak Sectors

EXAMPLE: The Fidelity Select Medical Delivery Fund (FSHCX) was downgraded to SELL rating on 2021-06-18. The fund returned -5% since the downgrade, while the benchmark index fund returned % in the same period.

Get Your Market Edge

Our exclusive SectorTRACKTM technology monitors the performance of sector funds relative to each other and to the market. The following three steps are used to progressively narrow the choices and to find the most promising investments during different market conditions:

Step 1: Momentum Screen

Long-Term Trends

First, we perform trend analysis combined with relative strength ranking to select investments that are not only in a bullish long-term uptrend, but also have the strongest momentum relative to the benchmark S&P500 index and other sector funds.

Click here to see market-leading Bullish investments.

Step 2: Fund Ratings

Short-Term Trends

Using the momentum screen we narrowed our selection to outperforming sectors that are also long-term bullish.

Next, we apply our proprietary pattern recognition technology to identify seasonal (short-term) trends, and rate the sector funds BUY, SELL or HOLD, accordingly.

This is an important step since we would like to avoid rotating into investments that are not advancing.

Click here to see funds, which are Rated BUY.

Step 3: Sector Selector

New Trades

At this point, we have a small set of sector funds that are not only trending higher both in the long and the short-term timeframe but also outperform the market.

Our daily report identifies purchase and sell opportunities for these top-performing sector funds.

The report also highlights potentially upcoming trades, in addition to recent upgrades and downgrades.

Click here to check if any investment is identified today as New Purchase.

Risk Management

Academic research has shown that strategies that overweight investments based on their price momentum can produce better risk-adjusted returns than passive investing.

However, utilizing a momentum-based sector rotation strategy is difficult for most investors due to lack of available low-cost research tools that show real-time results.

Most sector rotation strategies screen for momentum in multiple time frames (e.g. 6 months and 1 year), and “upgrade” their portfolio holdings once a month, or once a quarter by rotating into investments with the highest momentum in both time frames.

While this approach can work well in strong bull markets, during bear markets it will continue to rotate into sectors with the highest momentum, even if these sectors decline severely.

In addition, while it is convenient to rotate investments once a month or once a quarter, this may not be optimal since the stock market does not operate on a set time schedule.

Recognizing the hidden risks of the “upgrader” strategy, we developed an improved method to track sector investments. We use not only the price momentum, but also the direction of long- and short-term trends, and price patterns.

Our SectorTRACKTM technology improves on other momentum-based strategies in the following areas:
  • Lower investment risks by avoiding the rotation into declining investments during market corrections and severe bear markets
  • Enable quick response to new trends by providing daily updates

Mobile Ready

It literally takes only a few seconds to check the daily changes of sector ratings on your smartphone, tablet or other mobile devices.

Here are the two steps to set up a bookmark on your smartphone:
  1. Start Safari, Chrome or your favorite mobile browser and type in the address line.
  2. Create a bookmark to make our site accessible with just one click.

About Us

Fidelity Sector Report is an independent online investment newsletter that is not affiliated with Fidelity Investments.

Fidelity Sector Report is produced by Axiomix, Inc. (, a technical research firm.

Axiomix, Inc. is dedicated to the development of Next Generation investment tools that are intelligent, simple to use and help investors make better-informed decisions.

Axiomix, Inc. is rated A+, the highest rating by the Better Business Bureau.

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© 2021 Axiomix, Inc. SectorTRACK is a trademark of Axiomix, Inc. All Rights Reserved.

Axiomix, Inc. is not a registered investment adviser. The material provided on this website is for general informational purposes only and is not intended as investment advice. Past performance does not guarantee future results.