Markets concluded a shortened week on a high note, as good news via the jobs numbers this morning was perceived as good news for the markets as well. Not to long ago that number would have frightened the indexes as interest rate hikes would be needed to cool down an “overheated economy”. The Nasdaq took charge, almost like a champion thoroughbred who likes to be looked in the eye, before finding another gear. That is regarding the Russell 2000 that nearly caught the Nasdaq on a YTD basis, so it was good to see the Nasdaq reassert itself. The tech rich benchmark was higher by 1.5% Friday, the S&P 500 by 1.1% and the Dow and Russell 2000 added .9%. Semiconductors were the biggest contributor to technologies clout, and internet plays delivered a nice runner up showing with TWTR jumping 9% this week. The name was been on fire since filling in a gap almost precisely on 4/4 from the 2/7 session and it fell just 5 days in the month of May.
Looking at the individual groups bulls could mutter its not where you start but where you finish. The end of the week was welcome news for the bulls as technology woke up with some energy. The XLK was the best performer Friday jumping 1.7%, and just what you want to see lagging were the defensive staples and utilities as the XLP was UNCH and the XLU was an outlier off by 1.5%. The XLK busted above the round 70 number with no CLOSES above the figure although 5 sessions were above intraday since touching it recently on 5/10 (previously CLOSED above on 3/9 and 3/12 too). The ETF now has to contend with the nasty bearish engulfing candle on 3/13 that was preceded by a doji on 3/12 which was fair warning of impending weakness. On a weekly basis it was energy that was the best actor as the XLE advanced 2.4%, but it recaptured just more than half of the prior weeks 4.5% plummet. The staples look most in danger to me as the XLP is now 16% off its most recent 52 week highs and has declined 11 of the last 18 weeks. Most ominous to me is the last 5 weeks have all CLOSED very taut within just .34 of each other. The coiling action should lead to powerful move.
There have been some real standouts in the biotech/pharma space this year. I am old enough to remember many just focusing on the “big three”, AMGN BIIB and CELG (amazingly CELG now trades 46% off most recent 52 week highs). However there have been some real standouts and two that come to mind are SRPT and LGND both higher by 212 and 79% over the last one year period respectively. Below is another name that can not be left out of the conversation, NBIX and here is how it was presented in our Thursday 5/17 Game Plan. The stock is on a current 7 week winning streak with all seven CLOSING right at highs for the weekly range, a very bullish trait. It is now sniffing out the very round par number and is 5% above its breakout from a cup base trigger of 93.08 taken out on 5/16.