Markets scored a lukewarm session Wednesday with the Nasdaq higher by .4% and the S&P 500 by .25%. The S&P 500 did manage to eke out a fifth consecutive winning session. One has to admire its strength but to be balanced one has to be concerned with the churning action here at all time highs near that round figure. Bulls want to witness a decisive move above and it has stalled here a few times since February. There was not much new to report among sector performance as energy lagged badly with the XLE lower by .5% (the XLE is lower 15 of the last 23 weeks and by .5% heading into Thursday) and the utilities and staples groups both in the top three. Some earnings concerns came from the retail group which was not all that surprising until you see if came from three leaders. TIF and LOW were off by 8.7 and 3% respectively after ill received earnings reactions and ULTA lost 3.5% and undercut its 50 day SMA in active trade. Notice how ULTA met difficulty at the very round 300 number as it traded above intraday on 5/9 and 5/11 but was unable to CLOSE above and it is now down 4.6% for the week so far. Troubling with LOW is that is has fallen below its weekly cup base trigger of 83.75 so quickly and was unable to head north as we know the best breakouts tend to work out right away. Below is another example of waiting for PRICE confirmation. In yesterdays Game Plan we highlighted MNTA and today is NBIX which was also setting up in a good looking flag formation. Below is the chart of a peer in their healthcare group NBIX and how it was profiled in our Thursday 5/18 Game Plan. “Looking left” one saw how crucial the 55 level was, but the stock did not emerge from the flag pivot and the stock has now retreated more than 7% this week so far.

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