Eoin Treacy's view The persistence of the ASX's rally since late November has been impressive - rallying for 13 of the last 14 weeks. Unsurprisingly a short-term overbought condition is evident but perhaps more important is that the Index has pushed above the psychological 5000 level for the first time since 2008. As the Index extends this breakout it is creating more of cushion for the inevitable consolidation process that will follow. This adds weight to the possibility that the move above 5000 will be sustained. (Also see Comment of the Day on December 27th)

The banking sector has been one of the greatest beneficiaries of the RBA's interest rate cuts and the perception that these will continue for the rest of the year. The Financials Index reasserted its outperformance relative to the wider market from mid-January and clear downward dynamics would be required to check momentum.

In order to get a more complete impression of the market I thought that a review of the ASX's better performing sectors might be instructive.

The Consumer Staples sector broke out to new all-time highs in January and continues to extend its advance. It is becoming increasingly susceptible to mean reversion but a break in the progression of higher reaction lows would be required to suggest such a process is underway. .

The Healthcare sector has been outperforming for more than a year, led by Ramsay Healthcare. It continues to hold a progression of higher reaction lows and these would need to be broken to suggest a more than a reaction.

The Telecoms sector has been led higher by Telstra. The share has paused in the region of A$4.60 and will need to sustain a move above A$4.70 to reassert medium-term demand dominance.

The Utilities sector continues to trend consistently higher and a sustained move below the 200-day MA would be required to question medium-term scope for additional upside.

The Industrials sector has rallied to test the upper side of its more than three-year range. A sustained move above 4000 would confirm a return to medium-term demand dominance. Brambles is the Index's largest weighting and is leading it higher. The share broke out to new 5-year highs in November and continues to extend the advance.

The Materials sector rallied to break its almost two-year downtrend by early December and has had a progression of higher reaction lows since July 2012. A sustained move back below the 200-day MA, currently near 10,500, would be required to question medium-term scope for continued higher to lateral ranging.

The broad based nature of the current stock market rally is supportive of the view that the resurgence of investor interest in Australian equities is more than a short-term phenomenon.