Last week saw a 4 week streak which the Nasdaq outperformed the S&P 500 come to an end. It was a good run, as bulls feel more invigorated when the tech heavy index shines. Of course there are a myriad of subsectors within technology, but when one looks to park their money, always demand best of breed. More concerning recently is the number of breakouts that have fell apart, since we know a thriving market will lift new breakouts higher almost right away. One name that has had difficulty generating any momentum is IBM. The stock took out a 153.62 cup bas trigger on 5/31 and stalled out, often a red flag. The two generals that I am monitoring closely to see how there breakouts fare which could have implications on the overall market are AVGO and INTU.

In our Tuesday 5/24 Game Plan this is precisely how we looked at AVGO. Stocks that can be bought as they take out their 50 day SMAs and added to through future valid base triggers are AVGO. AVGO is a best in breed semi play up 2% YTD and 12% over the last one year period and sports a dividend yield of 1.3%. Four consecutive positive earnings reactions demonstrate leadership as the stock rose 6.4, 9.5, 8.7 and .6% on 3/4, 12/3, 8/27 and 5/28 (it REPORTS 6/2 after the close). Last weeks gain of 4.8% put an end to a 6 week losing streak and notice how the round numbers have been instrumental. The 140 number was breached intraday on 5/6, 5/12, 5/13 and 5/17 but CLOSED above each time. The 150 number is 50 day SMA resistance, reversed there Monday, and enter with a buy stop above at 150.25 and add to through a 159.75 cup base trigger. A breakout would achieve an all time high.

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