ChartSmarter Friday Game Plan 12/16/16

Markets gave up a good chunk of decent morning gains Thursday and it was the Nasdaq and S&P 500 adding .4% and the Russell 2000 gained .8% (the Nasdaq was higher by .9% early on). The chart of the Nasdaq looks a bit heavy with todays bearish shooting star candle after Wednesdays engulfing candle both at all time highs and for the week headed into Friday is higher by .3%. That has to be considered bullish after last weeks powerful 3.6% advance. The S&P 500 and Dow are a bit more overbought than the Nasdaq as their RSI’s were recently near 80 and 90 respectively and the Dow reversed as well just below the very round 2000o number. Perhaps too many market participants are forecasting that and it will be just a matter of time before it smashes through it. The Dow is looking for a sixth consecutive weekly gain and has risen .5% thus far this week and the S&P 500 has tacked on .1%. Nine of the eleven major S&P sectors gained ground Thursday with the only two exceptions being real estate and consumer discretionary. The leaders were the financials, healthcare, utilities and materials. The XLV is now higher 5 of the last 6 sessions and is back above its 50 day SMA, although that line is still sloping lower. It is a start however and over the last 5 days it has easily been the best performing group higher by 2.2%. A favorite name of mine currently is SGEN and below is the chart and how it was portrayed in our Wednesday Game Plan this week. Firstly this was a name in a beaten down group that admirably held its own, often a sign of a name that will outperform once the groups recaptures its former mojo. Thursday the stock recorded a bullish hammer candle after a nearly 20% drop from most recent 52 week highs top to bottom and that will normally signal the preceding trend could potentially reverse in the other direction. Notice it bounced off its 50 day SMA as well, a good sign.