Markets:
The Nasdaq CLOSED at the UNCH mark Wednesday, a day after finishing more than 100 handles off Tuesday’s intraday low. The small 40 point range today was characteristic for the tech heavy benchmark and heading into Thursday is higher by .4% for the week. Looking back it has advanced 8 of the last 11 weeks and all 8 of the gaining weeks CLOSED at or near the top of the weekly range, a bullish trait. One has to admire its strength as names like AMZN narrowly missed a 9 day winning streak, AFTER Monday’s gravestone doji candle.
The transports were very firm today with the IYT adding 2.3%, only its third 2% plus gain in the last 3 months. The whole group seems to be humming along, pun intended, as the rails look solid with NSC sits near all time highs. Today the airlines joined the party as the JETS ETF rose nearly 3%, but is still 12% off its most recent 52 week highs. This space still has plenty of room to grow as the delivery players FDX and UPS currently trade 14 and 17% off their own most recent 52 week highs and both reside below their 50 and 200 day SMAs. With those type of stats it is hard to believe the S&P 500 still remains just 2% off its all time highs.
Sectors:
Bifurcation existed Wednesday within the major S&P sectors as financials and industrials both rose more than 1% via the XLF and XLI, and on the losing end was the defensive utilities and staples lost .5 and .8%. Within the XLP there were very few winners among its largest components, and heavy losses were felt in particular as CLX and TAP both slipped 4%, with the latter now lower by 32% from most recent 52 week highs. The XLU is on a current 3 session losing streak still trades within that large ugly bearish engulfing candle from 7/9.
Peering into healthcare, the XLV continues to productively build the right side of its cup base, and has traded taut and sideways the last 5 days, not long after a 8 day winning streak between 6/28-7/10. It has the feel of being magnetically pulled toward the very round 90 number, where trouble began with just 2 CLOSES above on 1/26-29. The IBB is acting even better than the XLV now just 1% off most recent 52 week highs (XLV 5% off its) and just below a 119.40 cup base trigger. The IHI has advanced 12 of the last 14 weeks, and one now gets the reasons behind the recent positive sentiment toward the space.
Special Situations:
Sticking with the healthcare theme below we take a look at the chart of NVCR and how it was presented in our Thursday 7/5 Game Plan. One quickly notices the bearish shooting star candle on 7/3 at all time highs as it broke above a bull flag trigger. It was NOT a failed breakout as it CLOSED above the 32 entry and from there it never went any lower. The stock is looking for a SIXTH consecutive up week advancing more than 10% this week thus far, and it is higher 12 of the last 14 weeks, (the two down weeks managed to CLOSE in the upper half of the weekly range). It is now half way toward its measured move, although there is no saying it will get there or if it will stop there should it get to the round 40 figure. It could travel much higher from there, and why I am not a fan of the measured move, as it prevents investors from achieving potential powerful gains.