Markets showed a bit of resilience Friday to conclude the week and it was the Nasdaq, which led the way thanks to a nice gain in MSFT courtesy of a well received earnings report. The stock took out a 5 week tight pattern trigger of 58.80 which formed between the weeks ending 8/5-9/2 which all CLOSED within just .41 of each other. It sprinted to all time highs and while one would have liked to see it CLOSE above the round 60 number one can remain long or initiate a new position as long as it stays above that aforementioned pivot. For the week it was the Nasdaq that rose by .8% and the S&P 500 advanced by .4% as both indexes avoided the three week losing streak. The Nasdaq is now above its 50 day SMA for the first time in 8 sessions and YTD it has risen 5% compared to the S&P 500 higher by 4.8%. For the week the materials sector was the best performer with the XLB gaining 1.6% followed by the financials which added 1.2%. The XLB was the clear laggard with the XLP falling .8%. Earnings continue to come in fast and furious and in addition to MSFT, PYPL acted brilliantly jumping more than 10% hitting all time highs and taking out a long cup base trigger of 42.65 in a base that began the first week it was spun off from EBAY ending 7/24/15 (EBAY tripped up 9% this week). Another tech name that behaved dazzling was PFPT which surged almost 11% and is now sniffing out a double bottom trigger of 79.03. Notice how the stock was stopped at all time highs right at the round 80 number on 9/6-7. MCD added 3% Friday and on the weekly chart one can see a nice doji candle, the first one in all of ’16, which can signal the start of a trend change. Another tech play that will report next week is EXPE and below is how we examined the idea in our Friday 10/14 Game Plan. The stock is now more than half way to its target price of 133.
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