Markets put in a productive session Thursday finishing well off session lows. The S&P 500 overcame a modest early loss of .5% to CLOSE near the UNCH mark. The Nasdaq cut a 1% deficit in more than in half to end up lower by .3%. The Russell 2000’s flag continues to fly and it is still to be determined if it will continue to the upside and it lost .2% today. For the week heading into Friday the Nasdaq, which recorded a nice bullish hammer candle, is lower by .1% and looking to complete a bullish 3 week tight pattern depending on tomorrows close. The S&P 500 is higher by .3% and setting up for a SIXTH consecutive weekly gain. Tech is still being weighed down by its big components having difficulty with the big round numbers with GOOGL and AMZN batting with 1000 and NFLX the 200 figure. The fact that all three are struggling to move higher after recent breakouts is a big concern.
Looking at individual sectors the utilities and healthcare groups were strong. The XLU, which gained 1%, has demonstrated nice follow through since the bullish piercing line candle recorded on 9/28. Since the week ending 11/18/16 it has displayed a series of higher highs and lows and now has in place a cup base trigger of 56. The XLV added .6% and broke above a bull flag and is not inconceivable to travel to the round 90 number into year end. Industries lagging included energy, technology and the staples. The XLP is still feeling the heat following its 2.4% loss the week ending 9/22 which was its worst weekly drop since the week ending 9/9/16 which fell 3.9%. The fund is clearly under distribution and looks headed for a test of the very round 50 number, which better hold last trading at that figure last November-December.
Even as tech lagged today with the AAPL rotting as it sliced its 50 day SMA to the core, pun intended, some names are behaving well. For one ADBE screamed higher by 12% after delivering a solid quarter and it has been an excellent performer higher 31 of the last 41 weeks and almost assured another in the win column advancing by double digits headed into Friday. Below is a lesser followed name DXC and how it appeared in our Thursday 9/28 Game Plan. It is yet another example of a good looking bull flag formation that was taken out on 10/6 and acting firm POST breakout, just what you want to see as the best breakouts often work out right away. It added more than 4% on 10/12 crossing and more importantly CLOSING above the round 90 number and names that cross that threshold often go on to reach par and beyond. The stock is higher 10 of the last 11 weeks and trades extremely taut, unusual for a recent IPO and a hallmark bullish characteristic.