(Premium) November Communication Services Outlook

The downtrend in Communication Services remains intact. Aside from expecting a near-term relative bounce as we work through the last week of collapse, there’s no reason to be anything but underweight. It could be that we just saw capitulation in the space, but we’ve already seen two selloffs of similar magnitude this year, and neither resulted in a trend reversal.

On an absolute basis, momentum has been setting higher lows. But that seems like a better signal for the market overall, rather than a buy signal for the worst sector in the index.

There are some places showing relative strength. Netflix, which we pointed out last month, successfully broke out of a multi-month base.

And T-Mobile is setting new all-time highs.

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