Even though the market’s been down lately, hot sectors can hold up nicely. That’s why we’re interested.
But there is one other thing we can look at.
The problem with hot sectors is that sometimes, by the time we notice them, the best stocks have already moved up.
And chasing stocks is not a great strategy.
So, what can we do?
If we can’t find anything perfect in a hot sector, we can look at something similar in a lukewarm sector.
For example, if we miss BKNG, we can look at United Airlines (UAL).
While BKNG is how people book their trips, UAL is how people will take their trips.
Is the airline sector hot? Kind of. It’s not at the top, but it’s not at the bottom either.
And a breakout in an adjacent, relatively hot sector, can also be effective.
Here’s the chart on UAL:
UAL has already shown strength by moving above a long-term moving average.
If it breaks above $53.36, we could see a nice upward move.
The Airline sector isn’t the hottest one in the world.
But it could just be hot enough.