The rally by building stocks caught my attention yesterday in what was another fairly lacklustre session. The 4 local building stocks we are looking at today reside in the large Materials Sector which is illustrated below. At MM we had reduced our exposure to the influential Resources Sector, which also reside in the Materials Sector, in anticipation of this 10% pullback but now the risk / reward has done an almost about full turn with our preferred scenario being another leg to the upside is close at hand, or at least the majority of the pullback is already behind us – a great read through for the building and construction stocks.
MM is becoming bullish the Materials Sector after its 10% correction.
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