Exercise #4 Using the Sector Distribution Curve pictured here, answer the following questions. 4.) You have done your fundamental homework and come up with two stocks you would consider purchasing, McDonald's (MCD) and Microsoft (MSFT). A look at both of their Point & Figure charts and relative strength work show that MCD and MSFT are in positive trends with good relative strength versus their market and peer group. You can only buy one issue, which one would it be? Your answer was A. McDonalds (MCD) That is incorrect. If all other variables are the same, and they are as outlined in the question, we would prefer to buy stocks in a sector which is on offense and Favored. The Restaurant sector is on Offense, as denoted by the fact the sector is in capital letters, but the group is Unfavored because it is highlighted in red. Software on the other hand is not only on Offense, but the group is Favored since it is highlighted in green. Go back to the question.