Markets were mostly flat to start the week, but the Nasdaq did outdo the Dow and S&P 500, gaining .3%. Looking at the Nasdaq chart it seems to be stalling right at its 50 day SMA, something it did not do in April and July this year as it quickly recaptured the line and charged northward. The S&P 500 is doing the same thing and notice how the last 4 sessions have all finished within the daily range of the 8/22 day. I really like taut trade, but would be much more confident if this action was taking place ABOVE the 50 day SMA. Peering into individual sectors healthcare was the clear winner with the XLV adding .5%. The ETF is moving toward a test of its own 50 day and is now higher 5 of the last 6 days following a bullish engulfing candle on 8/21. Monday did manage to bring about some M&A activity. The big one was GILD taking out KITE at a hefty premium and both the acquirer and acquiree advanced, often a good sign. GILD has been a serial under performer within its group and perhaps it could return to its former mojo. It recently recorded a bullish golden cross, but more importantly has now CLOSED six straight weeks above its 200 day SMA, a line it has been below for almost 2 years prior and it is beginning to flatten out and of course bulls would enjoy seeing that start to slope upward. Below is the chart of peer JUNO and how it appeared in our Thursday 8/10 Game Plan. Last week it rocketed higher by nearly 14% and it has three other weekly gains of better than 7% since the week of 6/16. Surely its big jump today was in sympathy with the KITE news and one would be prudent to await a pullback before entering. Another deal not widely mentioned today was in the semiconductor group with IXYS being bought, again at a rosy premium gaining 40%.

This article requires a Chartsmarter membership. Please click here to join.