As expected, the DOW is rallying real hard. This time, I think it will go above 12500. The steel sector sold off after a sharp rise in the week. I take this as a good time to build a position into the weakness. Of all the metal sectors, steel has been the biggest laggard. This is because, raw materials are increasing fast, and utilization rates are low. Nevertheless, I expect the trend to continue up.
Financials should rebound after experiencing a sharp sell off. I will be a buyer of BAC, C and WFC.
The banking sector faces weak growth due to Dodd Frank act. However, growth in latin america and asia may offset such weaknesses. Citi will benefit the most in this. However, BAC low valuation compared to its tangible book value makes it a solid buy too.
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