Markets closed near session highs Friday to finish the week as the S&P 500 and Nasdaq overcame morning weakness, off more than .5% in the early going. For the week the Nasdaq outperformed up 3% and the S&P 500 rose 2.1% and YTD we have some bifurcation as the Nasdaq is higher by 1.8% and the S&P 500 is lower by 4.8% (the Dow comprised of more defensive, yield plays is off 7.8% in ’15). The most interesting session of the week was Wednesday with the ugly reversal and on the S&P 500 chart was a bull trap with a brief breakout above a pennant formation above the 1965 handle. It is why we are big proponents of CLOSING prices. The was also some bifurcation with respect to sector plays as the biotechs received some strength as the IBB rose 5.2% for the week and oil names continuing their slump. Crude lost 3% and ETF’s, XOP and OIH dropped 2 and 1.7%. Stocks to keep an eye on going forward in the healthcare space could be ABC. A former best of breed play we highlighted as a short (stock from our Monday 7/27 Game Plan and chart below how it was presented in our daily report) now looks to be setting up on the long side. This week ABC advanced 5.4%, albeit on very weak trade, ending a 7 week losing streak. It currently is at the top of a bearish rising wedge pattern at 200 day SMA resistance, but if it can break above its 50 day SMA a point higher, a double bottom with a trigger of 115.51 looms large. We still think the path to least resistance is lower, so treat longs with perhaps not as much vigor until we see some firmer uptrends taking place. Keep you portfolio “healthy”, pun intended.
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