Markets went out near highs for the session with more bifurcation as the Nasdaq lost ground for a fifth consecutive session dropping .5%, but it did record a bullish hammer candle which CLOSED above its 200 day SMA. Perhaps many thought the damage would be far greater as more big, “old tech” plays like AAPL which surrendered 6.3% after an ill received earnings reaction, much like MSFT did last Friday as it delivered a sour number (MSFT has been holding its important 200 day SMA as well near the round 50 figure). Of course we witnessed destruction to GOOGL and NFLX which gave up 5.4 and 13% respectively on 4/22 and 4/19. If one wants to look at the glass half full, the price action has to be respected as overall the benchmarks have been moving higher, ignoring some individual blow ups. While the Nasdaq resides 7% off recent highs, the S&P 500 is off by just 2% from its all time highs and now is sporting a double bottom with handle pattern with a trigger above 2111. This is courtesy of a powerful rebound of course in the financials (remember the weakness in the Nasdaq 100 is being aided by the lack of banks), industrial and energy and material names. Below is the chart of best of breed energy name EOG and how we viewed the stock with an entry just above the round 80 number in our Monday Game Plan this week. Looking left on the chart one could see how instrumental the 80 figure was as it was support between December ’13-February’14 and then resistance more recently between weeks ending 7/24-9/18/15. Resistance should now become support and one should keep an eye on a developing double bottom pattern with a trigger of 89.62.
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