While the rest of the market struggles to get off the ground (ie tech and finance) – oil, metals and basic materials soar to new heights.  In the market report posted January 26th (sent to free members of SelfInvestors.com) I highlighted the oil industry as several stocks began to break out of consolidation, which proved to be the beginning of another major oil advance.  A few top rated SelfInvestors.com  oil stocks highlighted in the report have catapulted to gains of more than 30% since then! (specifically GDP and TGA).  Well, now steel stocks are beginning to make that same kind of move.  At the end of last week, several leading steel companies made tremendous moves, some with record buy volume indicating institutions are jumping in again with both feet.  You can see the thinking behind the purchase of Metal Management (MTLM) in a previous post.

The surge in metals doesn’t end with steel.  Copper, gold and silver are showing big buy interest in the last 10 days after struggling since the beginning of this year.  Below is a chart of the Gold and Silver Index, which has managed to clear both major sources of resistance (the 50 and 200 day moving averages) in the last several days.

Now lets take a look at a chart of the new gold ETF, streetTRACKS Gold Trust Shares (GLD).  As I’ve mentioned before, studying the movements of widely followed ETF’s gives you insight into the movements of industries that you can’t get with index charts, such as the Philadelphia Indices charts.  Reason being that the ETFs are traded like individual stocks and provide volume levels.  Volume levels reveal the conviction behind the move.. the greater the volume, the greater the conviction.

It shouldn’t come as a major surprise that the last big move in gold topped soon after the new gold ETF became available near the end of November.  It was the subject of much conversation on CNBC and it brought the idea of purchasing gold stock into the comfort zone of the average investor.  You know when the average investor begins to purchase anything in major quantities, the end of the run is near.. at least temporarily.  After a big shakeout, gold looks poised for another run.  The break above resistance of the downward trend line in black with good buy volume indicates that a bottom may have been found at 41.  I would expect some consolidation in the near term as it battles resistance of the 50 day moving average, but a sustained move up looks promising at this point.

The following is a screenshot of the Top Industries table in the SelfInvestors.com Premium area.  It’s a table that provides a quick look at top performing industries based on 10,20 and 30 day performance (only 10 and 20 are shown here).  The number in parenthesis indicate the number of stocks currently in the Breakout Tracker (breakouts and near breakouts).  You can see it’s been all about oil, metals and chemicals recently.

  Semiconductors have been gaining momentum in recent months and Intel’s positive guidance Friday may just be enough to kickstart the sector into a nice sustained rally.  Clicking on the chart at the left… you can see that the Semiconductor Index is showing signs of strength by surging above two major resistance areas, the downward trend line in green and the 50 day moving average.  Studying areas of support and resistance allows you to gauge the strength of a stock or in this case, an entire sector.  Surging above resistance and finding support at the previous resistance is a sign of strength (notice the rise above resistance of the downward trend line and the subsequent support there before eventually rising above the next major resistance level of the 50 day moving average).  All signs of strength.

Semiconductor stocks to keep an eye on would include VIRL, RMBS, FLSH, ATMI and KLAC. 

You see it in awful new shows like ‘The Swan’ and ‘Extreme Makeover’. You see it in the booming popularity of Botox injections and its substitutes. You see it in the latest Atkins and South Beach low carb diet craze. People will go to great lengths and spend inordinate amounts to look good and feel good. This is certainly reflected in the rising share prices of the companies that cater to these needs.

Companies like Mannatech (MTEX), Reliv (RELV), Natural Alternatives (NAII), Nutraceutical (NUTR), NBTY Inc. (NTY), USANA Health Science (USNA), & Natures Sunshine (NATR) are experiencing record sales on booming demand for their nutritional supplements for everything from weight loss to athletic performance to women’s health. Companies that sell skin care and beauty aids are also doing very well. Helen of Troy (HELE), Inter Parfums (IPAR), Nu Skin (NUS) and Avon (AVP) are companies to watch in this area.

Cosmetic surgery and non invasive procedures are growing rapidly as well, helped by TV shows like the two mentioned above. Inamed Corporation (IMDC) is sure to benefit from this as a major provider of breast reconstruction, obesity solutions and non invasive surgery (they just got FDA approval for their answer to Botox – Hylaform). Laserscope (LSCP), a company that specializes in laser systems for removal of wrinkles, acne, sun damage, leg viens and hair is growing rapidly as well.

As always, any stocks listed in a post are not buy or sell recommendations, but suggestions for further research by you. Many of the stocks listed above are far extended from a reasonable buy point.