As we roll into summer, sector strength becomes even more important in a market that tends to chop around during this time of year. I always want to trade alongside the strongest sectors — not against them — and that mindset is especially critical right now.
If you’re looking for the best opportunities heading into the summer months, here are the top three sectors on my list.
Technology Is Leading the Charge
Technology just jumped four spots to become the best-performing sector in the market. That’s a big move and one that I want to participate in. Stocks like Nvidia (NVDA) have been driving the sector higher, and we’re seeing strong momentum overall.
This move also aligns perfectly with the seasonal strength we typically see in tech during the summer months. When sector leadership, seasonality and momentum all line up like this, that’s when I want to be taking trades.
Industrials and Communications Are Also Strong
Industrials remain right near the top of my list. It continues to lead the markets and show relative strength. We’ve seen consistent follow-through in this sector, and I expect that to continue.
Communication services is another favorite here. It has been one of the top three sectors this month and continues to gain momentum. When I look at the week-over-week rotation, it’s clear that this sector is maintaining strong positioning.
Avoiding Weak Links
While I like to focus on what’s working, it’s just as important to know what to avoid. Materials is still the weakest sector and not one I want to be involved in right now. Financials, which had been a favorite for most of the year, is now a mixed bag. I’m not rushing into financial stocks either, especially with the seasonality headwinds we’re seeing in June.
Bottom line — tech, industrials and communications are my top sectors as summer kicks off. That’s where the leadership is, and that’s where I’m focusing my trades. If you want to give yourself the best shot at success during what can be a choppy period, stick with what’s working and be selective with your setups.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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