Markets were mixed Thursday as it was the opposite of Wednesday when the Nasdaq and Russell 2000 outperformed. Today the Nasdaq lost .2% and the Russell 2000 .5% as the Dow Rose .1% and the S&P 500 fell by .1%. If one wanted to look at the tech heavy benchmark would rose colored lens, it has failed to follow through much from Tuesdays very concerning bearish engulfing candle and during the 3 session losing streak volume has receded with each day. The Dow chart is interesting as it is the only major index in the bearish zone below 50 RSI, and its 50 day SMA is beginning to flat line. It is showing coiling action within a symmetrical triangle, which traditionally can break either way and the last couple days found support at the lower diagonal line, but with BA acting the way it is and its continued swimming below its 50 day SMA caution is warranted there.
Looking at individual groups most sectors were lower and it was the materials, staples and energy that lagged. The staples chart via the XLP is an ugly one underneath both its 50/200 day SMAs, and on a YTD basis is the second worst performer off more than 6%, better than just the energy space with the XLE off more than 7%. The materials are not acting healthy either with the XLB lower by 3.1% heading into Friday and if that holds will be the ETF’s fourth drop of more than 3% in the last 7. Peering at the weekly technology XLK chart one can see this years best performer thus far has soft volume trends. One would have to go back to the week ending 12/15/17 to witness an accumulation week (defined as a powerful gain, CLOSING in the upper half of weekly range on volume at least 20% above average).
Utilities have been really making a decent showing as of late, of course they are not a leader by any means but are trying hard to thwart off its recent selling pressure. The XLU CLOSED above its 50 day SMA for a second consecutive session Thursday and below is the chart of NRG and how it appeared in our Wednesday 3/7 Game Plan. It is currently on a 11 session winning streak and broke above the problematic 30 number and a double bottom trigger of 29.71 on 3/9. The stock is looking at a potential 5th straight weekly gain higher by 3.4% headed into Friday. The previous 4 all CLOSED at the top of the weekly range gaining by a combined 17%. This name has acted much stronger than the XLU, albeit it is not your traditional utility. It is slowly moving toward a very long cup base trigger of 38.19 that began the week ending 6/20/14 and NRG could possibly get there sometime in ’18.