In This Edition... Window Dressing: Time to Chase Those Gains!  Sector/Industry Outlook for the 2nd Half of 2009  Open Trade Update - Raise the stop on Harvard Bioscience (HBIO)  Last Chance to Look Good? I love calendar milestones. As an active investor, they're the perfect reason to regroup, and make a specific plan for the next major time frame looming on the horizon. With that as a backdrop, today I've got some perspective that could help you make a little more money in the second half of 2009 than you may have otherwise.  First things first though....  Today's the last day of not just a fiscal quarter, but also a fiscal half-year. Given how well stocks have done during Q2 (and despite the deep dive into the red I'm seeing as I write this), I'm still seeing a decent dose of window-dressing for a few select stocks today.  What's 'window dressing'? It's when fund managers add stocks to their portfolios they wish they had added weeks ago. Basically, they're chasing strong performers. They do it because they want to show their bosses they've got a collection of healthy stocks as of the end of the calendar quarter (when their bosses look at the portfolio's snapshot and dole out bonuses). After that, the coasting resumes until the end of the next quarter.  You and I need to be aware of it because it can create artificial buying demand for certain stocks. That demand may fade as early as tomorrow though... the beginning of calendar Q3.  Just be careful out there today - those hot pockets could be deceiving. That's all.  Anyway, my key thoughts for this edition are bigger than a mere day. I've been working to identify longer-term sector and industry trends I think should last through the end of the year. Take a look.    Industry Selection & Strategy Why an industry-based approach to stock picking? In my experience, being in the right sector or industry (or avoiding the wrong one) can be just as important as picking the right stock. My selection strategy is simple. I want to see rising stocks, preferably coming off of a recent low. I also want to see rising buying volume - or 'accumulation' - which suggests the number of buyers is growing rather than shrinking. I consider other factors as well, but those two are the core of this exercise. Fortunately I've got access to that kind of data, down to the industry and market cap level. To keep things simple, however, I'm just going to consider all market caps by using the S&P 1500 industry indices.  Enough talk; let's get to it. In no particular order, my three key industry picks for the next few months.... 1. Pharmaceuticals  To a certain extent I'm going to mentally add biotech to my bullish pharmaceutical outlook, though bear in mind the nearby chart only includes companies specifically classified as pharmaceutical companies and not biotech companies (though the lines are blurred more and more every day).  My only caution regarding biotech is this - Dendreon's recent success with cancer immunity therapies along with swine flu hysteria may have fostered more hype than actual promise. I've got a hunch the better biotech stocks for the remainder of 2009 are going to be the stocks that have remained off the radar (less hyped) recently. Anyway, when the S&P 1500 Pharmaceutical Index made its recent move to 260, the move carried the chart well past a pretty important resistance line. However, the buying volume (the green columns at the bottom of the chart) started to grow progressively taller well before the breakout occurred. The market's also not heard much from pharma in a while. It may be time for these stocks to get taken off the shelf by investors bored with other groups. 2. IT Consulting and Services  Much like the pharmaceutical index, the S&P 1500 IT Consulting & Services Index has been knocking down some major barriers as it's made solid progress since March's lows. Though the same idea basically applies to all the charts I reviewed today, the consistency and persistency of the growth in buying volume is how this chart topped my list. Not that gains have been produced every week, but during the weeks when gains have been made, the buying volume's been getting stronger. The selling volume has been tepid. I know the term 'IT consulting and services' can mean a lot of different things. So, if you need some names to get the stock-search juices flowing, think of companies like Computer Sciences Corp. (CSC), Perot Systems Corp. (PER), and Syntel Inc. (SYNT) 3. Home Entertainment Software  I fell in love with gaming software stocks in April not because of their massive gains, but because of the slow-and-steady recovery effort being made on rising-but-tempered volume. (I don't minding jumping on well-paced trends, but I hate jumping on explosive moves.) In early June the uptrend was pressured, but once again the selling volume was weak. Then last week, the bulls rushed back in after the dip, buying more of these stocks than in any other week since February's pop. On other words, the buyers aren't fair-weather friends here... they came back to the table for more. Activision-Blizzard Inc. (ATVI) and Electronic Arts Inc. (ERTS) are probably two of the first names that come to mind when you're talking about video game makers. Honestly though, I think both of those charts are starting to look a little tired. I'd suggest looking for some of the smaller fish in the gaming software (multimedia & graphics) pond.   Honorable Mentions The list above wasn't an easy list to make; several groups stood out as great opportunities.  The other industries that were also seriously considered - and may end up being just as strong - include Semiconductors, Industrial Power Producers and Energy Traders, Electronic Instruments, Healthcare Equipment, and some Telecom groups (land lines, but not wireless).  I've got a feeling we'll be looking at these groups in the near future as well, if not in the newsletter, then in the blog or at our new community pages.   Takin' Care of Business Since we're low on space, it's a good thing we only have one trading item to take care of today. Let's raise the stop on Harvard Bioscience Inc. (HBIO). Shares have been soaring since Friday, gaining 53 cents (+15%), and currently trading at $3.98. This trade is up about 22% for us now... enough to scoot our stop up to at least break-even levels.