Markets displayed impressive resilience Friday, but did finish off session highs. It was refreshing to see the Nasdaq lead as the tech heavy benchmark added 1.6%. It did complete a bullish morning star pattern Friday and the candles have been adept in marking near term lows with the bullish harami on 2/9. FB did record a bullish hammer weekly candle, squeezing out a .40 gain, but is still well below a bearish head and shoulders formation that aligned with the round 170 number. AAPL reversed hard Friday at its downward sloping 50 day SMA and has now CLOSED below that important line 6 of the last 7 days. AMZN although ended the day underneath its 50 day SMA for the second straight day, but CLOSED well off session lows by 45 and 82 handles on Thursday and Friday. NFLX was well below its own 50 day SMA but did reverse powerfully and ended the day above its 50 day SMA, something it has done everyday in 2018. It still has to deal with bearish engulfing candles on 3/12 and 3/27 so lets see how this scenario plays out. The VIX completed a handle on its double bottom base Friday, and its first CLOSE below the very round 20 number. As long as it remains above the 15 number bulls should be playing defense.

Looking at individual groups all nine of the major S&P sectors gained ground Friday. It was the energy space that saw the best gain as the XLE rose by 2.1%, although on a weekly look it was the softest performer "rising" 1%. It was followed closely by technology as the XLK advancing 2% Friday, followed by materials, industrials seeing the XLB and XLI higher by 1.9 and 1.5%, and discretionary and financials both up 1.4%. Lagging was the defensive, moribund healthcare, staples and utilities with the XLV, XLP and XLU losing .8, .7 and .6%. On a weekly basis, all of the major S&P sectors rose, but it was the utilities that rose 3%, the second best showing this week behind the staples rising 3.5%. Suspect leadership as the staples have lost ground 6 of the last 9 weeks, and for that reason bulls have to keep their enthusiasm contained. For instance one would have to go back 4 weeks to see an accumulation week ending 12/8 for the XLF. A look on the weekly chart of the XLF shows the financials did record a bullish harami this week, so the tug or war between bulls and bears continues.

The financials have been under pressure recently but the XLF put in a decent weekly return higher by 2.8%. The ETF is now 9% off its most recent 52 week highs and is finding support near its rising 200 day SMA like it did early last September, before it thrusted higher after a quick test. It did record a bullish spinning top candle after losing more than 10% from the round 30 number which was resistance this January. Below is the chart of ETFC and how it appeared in our Monday 3/26 Game Plan. It is said the "dumb" money is often a good indicator of a market top, but this stock advanced 4.4% well outpacing the XLF. It did find support at its rising 50 day SMA after a recent cup base breakout, almost everyday last week, one our favorite plays. Friday saw robust volume as it bounced 3.4%. Investors may deposit capital into this name with a good risk/reward scenario here, pun intended.

Strength within this group is a good harbinger of the genuine health of the economy. MEOH is a chemical play UNCH YTD and higher by 26% over the last one year period and sports a dividend yield of 2.2%. Earnings have been unimpressive with a recent unchanged session on 2/1 after three straight losses of 1, 2.5 and 2.7% on 10/26, 7/27 and 4/27. The stock is on a 4 week winning streak up by a combined 12% (keep in mind that includes excellent relative strength the week ending 3/23 where the stock was up 4% as the S&P 500 imploded by 5.9%). It trades 6% off most recent 52 week highs and has acted well POST breakout from a 53.40 cup base trigger taken out on 12/1 with 2 successful retests on 2/9 and 3/2. Enter MEOH with a buy stop above a bull flag trigger of 61.25 which carries a measured move to 70.

Trigger MEOH 61.25.  Stop 58.

Peer NKE acting well and even UAA acting better. ADDYY is a German footwear leader higher by 22% YTD and 27% over the last one year period and sports a dividend yield of 1.3%. Earnings have been mostly higher with gains of 9.4, 1, 1.4 and 8.5% on 3/14, 8/3, 5/4 and 3/8/17 and a loss of 4.4% on 11/9. The stock is on a 3 week winning streak, and most impressive is the last 2 gaining nearly 2% after the big weekly gain of 12.1% the week ending 3/16. It is prone to firm moves last witnessed by a 24 of 32 week winning streak the weeks ending between 1/15-8/19/16 that doubled in the timeframe. The very round par number held last December and this January which was key as it was a retest of a double bottom breakout trigger of 100.85 taken out on 7/12. More recently ADDYY broke above a 119.08 cup base trigger on 3/16 and enter on pullback at 120.25.

Trigger ADDYY 120.25.  Stop 116.60.

Showing solid consolidation since bullish hammer WEEKLY candle week ending 2/9. UAA is a footwear laggard, we will not mince words as it is 30% off most recent 52 week highs, higher by 13% YTD and lower by 20% over last one year period. Earnings have been mostly lower with losses of 23.7, 8.6 and 25.7% on 10/31, 8/1 and 1/31/17 and gains of 17.4 and 9.9% on 2/13 and 4/27. The stock is higher 13 of the last 21 weeks, and the last six have all traded within the huge weekly gain of 26.2% ending 2/16. Volume trends have improved considerably since last November and a potential bullish golden cross is arising. Enter UAA with a buy stop above a bullish falling wedge trigger of 16.80 which carries a measured move to 22.

Trigger UAA 16.80.  Stop 15.80.

Recent new issue is not keeping pace with other peers that seem to be thriving. SFIX is a recent IPO retail play lower by 21% YTD and now sits 33% off most recent 52 week highs. It has registered just one earnings reaction on 3/12 it rose nicely by 6.9% on 3/12. The stock is lower 8 of the last 13 weeks, including big drops of 17.7, 9.6 and 8.7% weeks ending 1/19, 3/16 and 3/29, after hitting precise resistance at the round 30 number on 12/26-27/17. It has registered eight consecutive CLOSES above the very round 20 number but is making lower highs and higher lows carving out a symmetrical triangle. Short SFIX with a sell stop below 19.25 which carries a measured move to 7.

Trigger SFIX 19.25.  Buy stop 21.

Mega cap pharma names not acting well with JNJ and PFE off by 14 and 10% off their most recent 52 week highs. MRK is a healthcare laggard down 3% YTD and 14% over the last one year period and sports a dividend yield of 3.5%. Earnings momentum is softening with back to back losses of 2.2 and 6% on 2/2 and 10/27 after gains of 3.1 and .5% on 7/27 and 5/2. The stock is lower 5 of the last 9 weeks and now lower by 18% off most recent 52 week highs and is below a declining 50 and 200 day SMA. There have been big distribution weeks ending 10/27 and 2/9 that slumped 8.8 and 6.3% respectively. Look to short MRK with a sell stop below a bearish head and shoulders trigger of 53 which carries a measured move to 43. The weak action Friday recording a bearish dark cloud cover candle does not show confidence.

Trigger MRK 53.  Buy stop 55.20.

Good luck.

Trigger summaries:

Buy stop above bull flag trigger MEOH 61.25.  Stop 58.

Buy pullback into recent cup base breakout ADDYY 120.25.  Stop 116.60.

Buy stop above bullish falling wedge UAA 16.80.  Stop 15.80.

Sell stop below symmetrical triangle SFIX 19.25.  Buy stop 21.

Sell stop to short below bearish head and shoulders pattern MRK 53.  Buy stop 55.20.

 

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Markets displayed impressive resilience Friday, but did finish off session highs. It was refreshing to see the Nasdaq lead as the tech heavy benchmark added 1.6%. It did complete a bullish morning star pattern Friday and the candles have been adept in marking near term lows with the bullish harami on 2/9. FB did record a bullish hammer weekly candle, squeezing out a .40 gain, but is still well below a bearish head and shoulders formation that aligned with the round 170 number. AAPL reversed hard Friday at its downward sloping 50 day SMA and has now CLOSED below that important line 6 of the last 7 days. AMZN although ended the day underneath its 50 day SMA for the second straight day, but CLOSED well off session lows by 45 and 82 handles on Thursday and Friday. NFLX was well below its own 50 day SMA but did reverse powerfully and ended the day above its 50 day SMA, something it has done everyday in 2018. It still has to deal with bearish engulfing candles on 3/12 and 3/27 so lets see how this scenario plays out. The VIX completed a handle on its double bottom base Friday, and its first CLOSE below the very round 20 number. As long as it remains above the 15 number bulls should be playing defense.

Looking at individual groups all nine of the major S&P sectors gained ground Friday. It was the energy space that saw the best gain as the XLE rose by 2.1%, although on a weekly look it was the softest performer "rising" 1%. It was followed closely by technology as the XLK advancing 2% Friday, followed by materials, industrials seeing the XLB and XLI higher by 1.9 and 1.5%, and discretionary and financials both up 1.4%. Lagging was the defensive, moribund healthcare, staples and utilities with the XLV, XLP and XLU losing .8, .7 and .6%. On a weekly basis, all of the major S&P sectors rose, but it was the utilities that rose 3%, the second best showing this week behind the staples rising 3.5%. Suspect leadership as the staples have lost ground 6 of the last 9 weeks, and for that reason bulls have to keep their enthusiasm contained. For instance one would have to go back 4 weeks to see an accumulation week ending 12/8 for the XLF. A look on the weekly chart of the XLF shows the financials did record a bullish harami this week, so the tug or war between bulls and bears continues.

The financials have been under pressure recently but the XLF put in a decent weekly return higher by 2.8%. The ETF is now 9% off its most recent 52 week highs and is finding support near its rising 200 day SMA like it did early last September, before it thrusted higher after a quick test. It did record a bullish spinning top candle after losing more than 10% from the round 30 number which was resistance this January. Below is the chart of ETFC and how it appeared in our Monday 3/26 Game Plan. It is said the "dumb" money is often a good indicator of a market top, but this stock advanced 4.4% well outpacing the XLF. It did find support at its rising 50 day SMA after a recent cup base breakout, almost everyday last week, one our favorite plays. Friday saw robust volume as it bounced 3.4%. Investors may deposit capital into this name with a good risk/reward scenario here, pun intended.

Strength within this group is a good harbinger of the genuine health of the economy. MEOH is a chemical play UNCH YTD and higher by 26% over the last one year period and sports a dividend yield of 2.2%. Earnings have been unimpressive with a recent unchanged session on 2/1 after three straight losses of 1, 2.5 and 2.7% on 10/26, 7/27 and 4/27. The stock is on a 4 week winning streak up by a combined 12% (keep in mind that includes excellent relative strength the week ending 3/23 where the stock was up 4% as the S&P 500 imploded by 5.9%). It trades 6% off most recent 52 week highs and has acted well POST breakout from a 53.40 cup base trigger taken out on 12/1 with 2 successful retests on 2/9 and 3/2. Enter MEOH with a buy stop above a bull flag trigger of 61.25 which carries a measured move to 70.

Trigger MEOH 61.25.  Stop 58.

Peer NKE acting well and even UAA acting better. ADDYY is a German footwear leader higher by 22% YTD and 27% over the last one year period and sports a dividend yield of 1.3%. Earnings have been mostly higher with gains of 9.4, 1, 1.4 and 8.5% on 3/14, 8/3, 5/4 and 3/8/17 and a loss of 4.4% on 11/9. The stock is on a 3 week winning streak, and most impressive is the last 2 gaining nearly 2% after the big weekly gain of 12.1% the week ending 3/16. It is prone to firm moves last witnessed by a 24 of 32 week winning streak the weeks ending between 1/15-8/19/16 that doubled in the timeframe. The very round par number held last December and this January which was key as it was a retest of a double bottom breakout trigger of 100.85 taken out on 7/12. More recently ADDYY broke above a 119.08 cup base trigger on 3/16 and enter on pullback at 120.25.

Trigger ADDYY 120.25.  Stop 116.60.

Showing solid consolidation since bullish hammer WEEKLY candle week ending 2/9. UAA is a footwear laggard, we will not mince words as it is 30% off most recent 52 week highs, higher by 13% YTD and lower by 20% over last one year period. Earnings have been mostly lower with losses of 23.7, 8.6 and 25.7% on 10/31, 8/1 and 1/31/17 and gains of 17.4 and 9.9% on 2/13 and 4/27. The stock is higher 13 of the last 21 weeks, and the last six have all traded within the huge weekly gain of 26.2% ending 2/16. Volume trends have improved considerably since last November and a potential bullish golden cross is arising. Enter UAA with a buy stop above a bullish falling wedge trigger of 16.80 which carries a measured move to 22.

Trigger UAA 16.80.  Stop 15.80.

Recent new issue is not keeping pace with other peers that seem to be thriving. SFIX is a recent IPO retail play lower by 21% YTD and now sits 33% off most recent 52 week highs. It has registered just one earnings reaction on 3/12 it rose nicely by 6.9% on 3/12. The stock is lower 8 of the last 13 weeks, including big drops of 17.7, 9.6 and 8.7% weeks ending 1/19, 3/16 and 3/29, after hitting precise resistance at the round 30 number on 12/26-27/17. It has registered eight consecutive CLOSES above the very round 20 number but is making lower highs and higher lows carving out a symmetrical triangle. Short SFIX with a sell stop below 19.25 which carries a measured move to 7.

Trigger SFIX 19.25.  Buy stop 21.

Mega cap pharma names not acting well with JNJ and PFE off by 14 and 10% off their most recent 52 week highs. MRK is a healthcare laggard down 3% YTD and 14% over the last one year period and sports a dividend yield of 3.5%. Earnings momentum is softening with back to back losses of 2.2 and 6% on 2/2 and 10/27 after gains of 3.1 and .5% on 7/27 and 5/2. The stock is lower 5 of the last 9 weeks and now lower by 18% off most recent 52 week highs and is below a declining 50 and 200 day SMA. There have been big distribution weeks ending 10/27 and 2/9 that slumped 8.8 and 6.3% respectively. Look to short MRK with a sell stop below a bearish head and shoulders trigger of 53 which carries a measured move to 43. The weak action Friday recording a bearish dark cloud cover candle does not show confidence.

Trigger MRK 53.  Buy stop 55.20.

Good luck.

Trigger summaries:

Buy stop above bull flag trigger MEOH 61.25.  Stop 58.

Buy pullback into recent cup base breakout ADDYY 120.25.  Stop 116.60.

Buy stop above bullish falling wedge UAA 16.80.  Stop 15.80.

Sell stop below symmetrical triangle SFIX 19.25.  Buy stop 21.

Sell stop to short below bearish head and shoulders pattern MRK 53.  Buy stop 55.20.