The Run for The Roses is alway best described as the best two minutes in sports. Let's take a look at a little longer time frame from an investment point of view. Directly below is how we profiled the name in our 4/30 Consumer Report and then we will take a peak at the WEEKLY chart. Gambling play higher by 25% YTD and 12% over the last one year period. Dividend yield of .5%. Rose 8.2% last week for third best weekly gain in last one year, also on third best weekly volume in same timeframe. Enter on pullback into very round par number at 100.75 after recent breakout above cup base. First CLOSE above 100 Monday since 7/25/18. Add to this name above 104.96 cup base pivot in pattern that started in May '18. Enter CHDN 100.75. Stop 96.25. Longer the base the greater the move on the potential breakout. Strong volume trends last couple years have stock just 2% off most recent all time highs. Look for stability above very round par number where name was hesitant last spring too. Could be on verge of major move higher.
Technology Perseverance: Below are the gains YTD for all 11 major S&P sectors. Technology is a clear leader, and one has to come away impressed as it remains at the top of the leaderboard week in and week out. As the saying goes it is harder to remain at the top, than it actually was getting there in any endeavor. Today rose 1.6%, a nice but not huge gain, and that somewhat underscores that although the overall move in tech has been robust, trade has been somewhat taut in 2019, a hallmark bullish trait. Fridays gain was the fifth best daily advance and I would have that that would have been more. AMZN is less than 100 points from a 2050 cup base pivot in a pattern 8 months long. AAPL looks like it is being magnetically pulled toward its own cup base trigger just above 233. If these two pivots are hit the 27.6% yearly gain in the XLK will look pedestrian. Semis Flip The Switch: One week after an unusual gain for the software group, but a loss for the semiconductors, the tables were turned. This week its was the chips that rose by 1.5% while software FELL .4%. Perhaps the fight for supremacy within the technology space between these two standouts is taking a toll on each other, like two thoroughbred going neck and neck down the stretch after a mile of dueling (horse racing reference but of course these two can both keep leading). My belief that the softness in XLNX after last weeks sizable earnings drop was a big concern. That looks to be wrong thus far, but perhaps new leaders are ready to step up and fill in the former generals shoes. IPHI CREE and LSCC could fill the void after nice reactions this week to numbers. Examples: The CEO of TWTR put forth some bifurcation this week with the two names he runs. TWTR rose 5.5%, while SQ FELL 4.2% (the latter is now 32% off most recent 52 week highs while peer PYPL is just 2% off its own recent peak). Below is the WEEKLY chart of TWTR and how it appeared in our 4/29 Technology Report. This week was its first CLOSE above the round 40 number in 10 months, and on its daily chart it was within pennies or above 40 intraday the last 8 sessions before todays 2% finish above it. The stock shows the power of the earnings gap. Some like to sell into them but the best ones will continue to grind higher. TWTR rose 5.5% this week, the week AFTER the huge earnings move of 12.4% the week prior. This one should continue higher and do not be surprised with all time highs sometime this year.
Absorbing Blows: The industrial space continues to hold its own in 2019 as we enter the fifth month of the year. Give it credit as it has had to endure a couple drubbings. Two of the top five components in the XLI, BA and MMM, have bruised the ETF but it is making a stand. BA is now on a 5 session losing streak, and for those that have correctly stated that it will not go down on bad news, as time goes on it is not rising either. MMM that slumped lower by 12.4% last week is following through again this week off well more than 3% heading into Friday. The ratio chart comparing the XLI to the S&P 500 shows it is still in a nice uptrend. Soft Landing? Or turbulence into the runway? Boeing, being the largest component in the XLI will obviously have some say in the direction of the group. After meeting resistance at the round 400 number on 4/5, its 50 day SMA has begun to slope downward putting a damper on the short term trend. Time as we mentioned above is becoming a factor, as it is true that the bears have been unable to push the stock lower. But at the same time the bulls have made little effort to demonstrate some price appreciation. This is likely to resolve in a frenzied fashion as the Bollinger Bands tighten to the tautest they have been since last November. Examples: There always seems to be chatter about infrastructure. Talk is cheap though, and PRICE action always matters more. Below is the chart of a heavy construction play KBR, and how it appeared in our 4/3 Industrial Report. It is having a banner year higher by 48% thus far and has risen 14 of the last 16 sessions. Depending on tomorrows CLOSE it is looking like a 6 week winning streak is going to occur. During the timeframe it has gained 28.9% from top to bottom, while the XLI has added 8.3%. A break intraday above a bull flag reversed Wednesday, and the 23 area was resistance last October and November. A decisive break above could be powerful.
Healthcare Anchor: The XLV's weakness continues as it is by far the "worst" behaved major S&P sector thus far in 2019. The ETF is still higher by more than 3%, but its second nearest competitor, the utilities, are higher by double digits up 10.6%. We recently spoke of energy being feast or famine, and one can say the same about healthcare as 4 of the last 6 years it has been in the top 4 on the yearly sector leaderboard. Even when it was THE worst actor in 2010 and 2016 the damage was limited. In 2019 on an absolute basis the 3% plus gains are not so bad, but compared relatively this year to a technology group up nearly 30% and the discomfort is evident. Last week we spoke of the seasonality potentially kicking in. Maybe that will soothe the value players somewhat going forward. Biotech Bloating: The biotech arena has been weighing down the healthcare space. Prior best of breed names, like ABBV and RGEN, still linger in bear market mode lower by more than 20% from recent 52 week highs. Other like AMGN and BMRN are very close down in the high teens from their recent peaks. The XBI fell more than 10% the weeks ending 4/12-19, and this week is lagging once again off by 4% heading into Thursday (other bearish weeks ending 3/8 and 3/22 dropped 5.8 and 3.7% respectively, both in elevated volume). Will the rhetoric concerning drug prices during the primaries for next year election start to weigh? Examples: One always wants to pay close attention to names that are bucking the trend in a weak overall group. They will often be the first big winners out of the gate once the sector sees some positive rotation back into it. Below could be a good example with the chart of NVTA and how it appeared in our 4/24 Healthcare Report. This is a stock that still has a rising 50 and 200 day SMA, with nice space between the two. There were a couple things to like with the nice action POST breakout, and we know the best ones tend to work right away. More recently it held its 50 day SMA for the initial time following the breakout last week, often a good risk/reward entry spot.
Financial Omen? The markets have been doing just fine without the financials for a long time. As some are declaring that it is an ominous sign, could it be true? To me we are still in a rolling bull market and this is just the latest sector to catch some love. On a broader sector basis high yield is holding up well, a good sign for equities as they often rise in tandem (JNK higher 15 of the last 18 weeks). The XLF itself is showing some vigor with JPM and BAC, the second and third largest components in the ETF, just 3 and 4% off most recent 52 week peaks. The inclusion of the financials is a good sign in my opinion, and a move above a WEEKLY double bottom in the chart below would erase the lower highs. Former Leader Fortitude: Goldman Sachs has long been the subject to a negative narrative, but here we just like to take a look at charts, and leave any other discussions outside of PRICE action to others. It certainly no longer holds the clout it once did and trades 16% off most recent 52 week highs. There are some things to like with the digestion of the huge week ending 1/18's gain of 14.5%. For 11 weeks it traded within the intraweek range, until blasting above the week ending 4/5. Round number theory comes into play as the very round 200 figure was resistance between January-March, and throughout April recorded just one CLOSE below. That is your line in the sand, and below is the Bollinger Bands that are "squeezing" which often predict big corresponding moves. Examples: The exchange names have been showing a bit of energy as of late. They have taken some sizable hits and CBOE recorded a 36.6% haircut from top to bottom between weeks ending 2/2-12/28/18. Below is the chart of the stock and how it appeared in our 4/17 Financial Report. It is now just 12% off most recent 52 week highs, and recently broke above not only its 200 day SMA (today was its ninth straight CLOSE above), but also through the very round par figure. The estimated measured move is to 111, and the current look at the name shows and add on above a bull flag pivot of 102.