Chartsmarter Insights

The More Things Change The More They Stay The Same: Within the former "old big four" biotech giants, only one is really still shining brightly, and give it credit for hanging with the "contemporary" mega cap leaders. Of course CELG was swallowed recently by BMY, and BIIB still currently trades 25% off most recent 52 week highs. GILD, to me feels like the AMD of the semiconductor space. Every time it feels like it is ready to break out, it just can not follow through (that being said a daily CLOSE above 78 could change my mind). Let us now focus on the general within the ancient trio, deservedly so, in AMGN. It now trades just 4% off most recent 52 week highs, and today reversed 13 handles off session lows. The area where it did so was even more important, and reiterates that breakouts are often retested to make sure of their validity. It turned higher after touching the area of a 239.27 cup with handle breakout taken out on 7/1. The breakout was very impressive as well, as it catapulted more than 8%, CLOSING on its highs, in the third best daily volume in the last 11 months. Respect.

Recognizable Adversary: There is an old adage in markets that PRICE "has memory". It tends to find support and resistance in places it has before, and it is important to recognize the levels. Below is the chart of the former "old tech" best of breed cyber security play. In recent times it has been overshadowed by the likes of a CRWD FTNT and AKAM to name a few. The stock has recorded a powerful run recently doubling off the March lows like many names have, and the round number theory is pushing this one back, at the 250 figure on a WEEKLY CLOSING basis (just one week was able to CLOSE above it, the week ending 5/3/19). It was 5 handles above today 250 Monday, but reversed in a meaningful manner. Of course this week is still very early, and it could go on to eclipse the figure, but let it prove it. Makes sense to be cautious at these levels, as it has faltered here before, but remember the markets job is to confound the most. If it can break decisively and CLOSE above 250, than it can be off to the races. But most importantly let PRICE confirm. Buying early can be costly.

Sell At Your Own "Discretion": It is hard to leave out AMZN, when discussing the performance of the consumer discretionary group, although one still has to marvel at its current 10 week winning streak, and has advanced 15 of the last 16 weeks. Below is the chart of the XLY, and AMZN is the largest holding, and it carried the fund on its shoulders up 10.7% for the week. Four other top ten holdings fell this week, albeit the "largest" drop was TJX falling 1.3%. The best of the other 5 gainers was also mild with BKNG up 2.2%. In my opinion there is just one name from a technical standpoint that can be mentioned in the same sentence as AMZN, and that is LOW. It presently trades just 1% off all time highs, and is benefitting from a resurgent homebuilding space as the ITB added 4.4% this week. LOW has traded very taut overall since a precise bounce off the round 60 number on 3/19 and has more than doubled since. It broke above its February highs on 5/27, and retested the 2/20 highs before pushing upward once again. A move above 139 has room to 160.

Vaccine Chase: Select stocks that have been involved in pursuit of a vaccine have seen their shares PRICES flourish. Others like a GILD have found the endeavor a bit sobering. It had some brief spurts of brilliance fade away very quickly, some in less than a trading session, and now the chart is taking on the look of a bearish rounded top. Two others that have been battling it out for supremacy are MRNA and NVAX. The chart below of MRNA is a bit appealing, now that it has shaved off more than one quarter of its value, although it is now resting near the comforts of its 50 day SMA which it has become familiar with in 2020. NVAX has behaved a bit superior, as it deals with the overhang of the very round par number for the first time. It has undergone an extraordinary run to say the least as it had a 3 handle this January. Getting back to MRNA it has been trading sideways between 55-67 and a break out of that range either way should give valuable clues as to where this play is headed into year end.