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| Lesson 5: |
Part 2 - Continued - Favored Sector Status |
Let's look at an example of how we determine Favored Status. In this graphic you
will see we have the four charts that need to be evaluated. We'll start off with the first one and just start counting.
The DWAOILS Sector Relative Strength chart is in X's so that is one positive. Next, take a look at the RSX chart and
we see that it has just given a buy signal. That's two positives. A look at the PT chart and that is also in X's
making three positives. The RSP chart is still in O's so we can't count that as positive. But a score of 3 makes
the Oil Service sector Favored.
The Oil Service sector was favored from September 22nd 2004 to April 28th 2005.
During this time the sector was up 14.61% while the S&P 500 Equal Weighted Index was only up 5.04%.
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