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deGraafsDaily

Wednesday J anuary 30, 2013

IntermediateTermBarometerIndustryGroupTechnicalRankings

JeffreydeGraaf,CMT,CFA RobGinsberg AlexMeintel,CMT ChetanJain technical@renmac.comImportantdisclosureonlastpage

Strongest Weakest

Automobiles DiversifiedConsumerServices

Construction Materials Multi

Utilities

RealEstateManagement&

Development MultilineRetail

BuildingProducts ElectricUtilities

CapitalMarkets Tobacco

PleaseDoNotForward

Energyhasbeenalaggardinourwork,withrecentsignsofrelativeperformancegivingitthebestglimmersofhopeasoflate. It

remainsessentiallyneutralinoursectorweightings,butnearly42%ofthenamesmade65dayhighsonTuesday. Refinersare

clearleaderswith98%oftheindustrygroupata65dayhigh,butothersegmentsofthesectorareonthemend. Buyingthe

namesthatarentperformingistemptingasacatchupplay,butwefindchasingtherelativestrengthnamesisabetterstrategy

asagroupimproves. Weveputahostofour1sand2sonaweeklybasisintodayspiece. Energyisimportantbecauseit

signifiesan

important

input

to

inflation

which

is,

in

itself,

an

important

input

to

forward

multiples

for

equities.

This

will

be

a

relativecallforthesector,particularlyagainstdiscretionarynames,asthatperformancedifferentialtendstocloselyfollow

inflation. Fornow,crudeoilstillappearslockedinaneutraltrend,andwhilewearewillingtoincreaseexposuretothesector,we

donotbelievethatitrepresentsleadership.

IPOsperformancereflectsconfidenceandliquidity. Theindexwasanearlyandtimelyindicationofthebullishenvironmentfor

stocksbackinthe4th quarter,anditcontinuestodowell(withandwithoutFB). Wehaveputinsomeofourfavoritenewissues

intodayspiecetogiveyousomefreshideas,mostlygrowthrelated,thatshouldserveasaproxyforoverallmarkethealth.

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