Stock Market Sectors Explained

Stock market sectors are a key part of any trading or investing decision as we attempt to analyze which are strong and bullish, which are weak and bearish, and those in congestion. All stocks are categorized and defined by the sector of which they are a part, and as such, this defines the characteristics of the stock and how it is likely to perform throughout the economic cycle.

Just like a stock, we can analyze sectors in the same way since they appear as charts, often with volume allowing us to apply our volume price analysis methodology. In addition, sectors are a key ingredient in the economic cycle as we attempt to analyze the big picture in order to follow those sectors performing well, whether as investors or traders.

However, sectors are a confusing area, with a myriad of nomenclature and methodologies developed by various companies over the years, and in this module, we unpick them all, so you have a clear picture of which of the various approaches are important and why.