Industry Group Analysis

This Week: Big Chart Update for the Week of October 22

1.	Introduction
2.	Groups That Are Heating Up
3.	Groups That Are Cooling Off
4.	On The Radar Screen This Week
5.	Disclaimer

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1.	Introduction

Earnings have been the primary driver behind the changes in
industry group rank on the Big Chart.  Groups that have been
showing upward earnings momentum, such as automotive
retailers, or are perceived as getting a boost from recent
events, like generic drug makers, are being rewarded with
higher rankings.  Conversely, those groups with murky
earnings outlooks have seen their rankings fall, as is
happening among copper stocks.

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2.	Groups That Are Heating Up

Drugs/Generic and OTC {.DRU} continued to rise on the Big
Chart, with its ranking improving for eight out of the last
nine weeks.  Fears over the spreading anthrax outbreak have
caused discussions about allowing companies other than
patent-holder Bayer AG {BAYZY} to produce antibiotic Cipro
and, as a result, shares of generic drug manufacturers have
risen.  Among the chief beneficiaries of this sentiment has
been Pharmaceutical Resources {PRX}, which already has
approval to begin producing Cipro when Bayer's patent expires
in 2003.  Earnings growth and a renewed interest in equities
has also helped the group with shares of Mylan Laboratories
{MYL} rebounding and First Horizon Pharmaceutical {FHRX}
rising last week.

Despite the economic deceleration that occurred during the
third quarter, automobile dealers and parts stores have been
the primary drivers behind Retail/Stores/Specialty's {.RSP}
resurgence.  The group rose back into green territory this
week, with an 89th percentile ranking, for the first time
since September 4 as auto stocks are trading at six-week or
52-week highs.  Propelling the auto dealers are Sonic
Automotive {SAH}, which raised 2002 earnings guidance last
week after acquiring four dealerships, and Group 1 Automotive
{GPI}, which reiterated its Q3 guidance on as used car and
parts and service revenues remain strong.  Similarly,
automotive parts retailers Pep Boys {PBY} and Autozone {AZO}
have been trending higher on earnings expectations - the Q3
consensus estimate for AZO was raised last month.

Other groups with rising rankings include Broadcasting
{.BRO}, Electronics {.ELE}, Leisure/Casinos-Gaming {.LCG},
Retail/Merchandising {.RME}, Retail/Stores/Furniture {.RFU},
and Retail/Stores/Warehouse Clubs {.RWC}.

To view the Big Chart click the link below.

http://www.wallstreetcity.com/commentary/commentary_group_rotation.asp
____________________________________________________________

3.	Groups That Are Cooling Off

The ranking for Basic/Mining/Copper {.MCP} fell to the bottom
three percentile this week as copper prices continued to
plunge.  The weak economic conditions in the United States
and Europe have hurt demand for the metal, sending copper
supplies to their highest levels in 18 months.  As a result,
copper prices are trading at 15-year lows as traders
speculate that a recovery will not occur over the short-term
- evidence of how negative this sentiment was witnessed last
Tuesday when short-selling reached its highest level since
1986.  Companies impacted by the collapse in prices include
Phelps Dodge {PD}, Southern Peru Copper {PCU}, and Freeport
McMoran {FCX}.

Other groups with declining rankings include Beverages
{.BEV}, Beverages/Distillers {.BDI}, Broadcasting/Television
{.BTV}, Homes/Hotels-Motels-Inns {.HOT}, and
Telecommunications {.TEL}.

To view the Big Chart click the link below.

http://www.wallstreetcity.com/commentary/commentary_group_rotation.asp
____________________________________________________________

4.	On The Radar Screen This Week

For the second week in a row, Electronics/Semiconductors
{.ESE} is being placed into the spotlight as a group to keep
an eye on.  Technical strength among chip stocks is a
necessity for the Nasdaq {NASD} to break above its 50-day
moving average line and continue its recent rebound.
Whether chip stocks continue to improve, however, will be
dependent on perception as how quickly an economic recovery
occurs.  One proxy will be the holiday shopping season,
which will start in a few weeks.

To view the Big Chart click the link below.

http://www.wallstreetcity.com/commentary/commentary_group_rotation.asp

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5.	Disclaimer

WallStreetCity's Industry Group Analysis is published solely
for informational purposes and is not a solicitation or an
offer to buy or sell any stock, mutual fund or other security.
The information obtained from internal and external sources
is considered reliable, but has not been independently
verified for accuracy and completeness.  WallStreetCity, its
employees, and/or officers and directors, may from time to
time have a position in the securities mentioned and may sell
or buy such securities.

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result in or guarantee profits in trading.  Past performance
is no indication of future results.

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