ChartSmarter Friday Game Plan 9/23/16

Markets displayed great follow through Thursday, a day after a nice Fed inspired gain. The Nasdaq rose .8% and for the week and headed into Friday has advanced 1.8%, equaling the S&P 500’s move. If the Nasdaq can manage to outshine the S&P 500 on Friday it will be the tenth consecutive week the tech heavy benchmark will outperform. After todays healthy tape the Nasdaq is at an all time high and the S&P 500 has reclaimed its 50 day SMA. Thursday was the staples turn to lead with the XLP rising .9%. Healthcare continues to gain and the XLV chart demonstrates the role candlesticks have played in recent tops and bottoms. The ETF has acted well since the bullish engulfing candle on 9/12 which was retested the next 3 sessions and held firm, confirming the validity. Going back a bit further a bearish dark cloud cover candle on 8/2 was the 2016 highs and a bullish morning star pattern completed on 6/28 put in the near term lows. It is quickly approaching its 50 day SMA and one can enter with a buy stop above the line at 73.75 and add to above a double bottom trigger of 75.10. Below is the chart of PRTA which we profiled in Wednesdays Game Plan this week where a long cup with handle pattern AND the round number theory came into play providing a “cluster of evidence”. The cup with handle base began the first week of last December and we know the longer the base, the greater the chance of success. Financials and energy lagged although both groups gained as all major S&P sectors advanced.