ChartSmarter Friday Game Plan 7/8/16

Markets were slightly bifurcated Thursday with the Nasdaq leading the way over the S&P 500 gaining .4% and the S&P 500 slipping fractionally by .1%. It was the third time in the last 4 sessions that the Nasdaq outperformed the S&P 500 and it is a welcome development. Give the Nasdaq some credit as it has now CLOSED above its 200 day SMA for a fifth consecutive day and it looks for the time being like a bearish death cross might not occur (it is not as negative as many make it out to be). For the week headed into Friday the Nasdaq is outshining the S&P 500, advancing .3% while the S&P 500 has declined .2% thus far. Give a little extra credit to the Nasdaq as it is tacking on gains to last weeks 3.3% jump, which was its second best weekly showing in 2016. We know the healthcare group has been pitching in, with the biotechs doing the lion share, and the semis are starting to perk up a bit. Air seems to be letting out of the energy space, and we think it is not a coincidence as we have heard some big round number forecasts thrown around with a $70 crude target by RJF and this week MS put an $80 number on it. They have led with the XLE the best performing sector over the last 3 month period with the XLE rising 10%. Perhaps it is time for the group to rest for another leg up and remember it is healthy for other sectors to be rotated into. The XLU had its worst session since 5/18 falling 1.8% and it would not be surprising to see the ETF go back and retest the 51 breakout handle from a 3 week tight pattern. Reverting back to what has been working, the healthcare space has managed a few nice looking breakouts in recent days. One we like in particular is Q, which yesterday took out a 68.09 double bottom trigger and today displayed nice follow through gaining another 1% on a lukewarm tape. Below is how we profiled the name in last nights Game Plan. The stock is now on a 7 session winning streak with good volume accompanying the move and is higher by 3.2% heading into Friday, very respectable given last weeks advance of 5.6%.