By MICHAEL KAHN
Investors are moving into financial stocks and away from consumer discretionary and tech stocks. But for how long?
THE YEAR 2010 OPENED with a bang for financial stocks as they went from market laggards to market leaders in a hurry. The Select Sector SPDR Financial exchange-traded fund (ticker: XLF) gained nearly 5.7% last week compared to the Standard & Poor’s 500 gain of 2.7%.
Not too shabby for a sector that has gone essentially nowhere for the past five months.
The question is whether this is a true change in the sector’s fortunes or merely a wiggle within a trading range. While finally having bullish potential after a long hiatus, the group has not yet made a technical breakout. Therefore, we have to continue to believe that these stocks are still in a trading range.
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