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The biotech space remains red hot with the XBI almost completing its "V Shaped" recovery. It trades just 2% below a double bottom pivot of 98.86, and will have a formidable challenge at the very round par number which has been significant resistance. If it can break above that area soundly the group will get a big boost obviously. Below is the chart of NBIX and how it appeared in our 4/21 Healthcare Note. Biotech play lower by 6% YTD and higher by 29% over last one year period. Nice start to this week after prior two jumped by a combined 15%. Prone to strong moves with 25 of 32 week winning streak between weeks ending 5/3-12/6/19 (4 of 7 WEEKLY decliners fell less than 1%). Four of last five earnings reactions lower by .6, .1, 5.9 and 3.8% on 2/5, 11/5, 4/30 and 2/6/19. Enter on pullback into very round number/break above long downtrend line. Entry NBIX 100.40.  Stop 95.

Transport Misery Or Opportunity: While the industrial space is a very diverse one, it is also a very economically sensitive one. Many groups in the arena tend to give a good signal about the genuine health of the economy. One could be looking at the moment at airlines, as the government may be looking to take an equity stake in select ones, and they see the JETS ETF now down 55% from most recent 52 week highs. If one was to watch try to get a feel for how the election in November may go, they may look at the ITA, a defense fund now off 40% from its highest yearly peak. The one that probably has the best overview of all of them would be the transport related IYT. This of course gives a good idea of how well goods are being shipped around, with rails, truckers and airlines. Last week the fund rose powerfully like everything else, to the tune of nearly 12%. It has lost nearly one third of its value from 52 week highs, and it ran into an upside gap fill from the 3/11 session on 3/25 and retreated. Is that all the gas bulls have in the tank, pun intended?

We should continue to remain nimble and small in this current environment, but also vigilant on monitoring charts that are holding up well in this climate. Below is a good example of that with the chart, and commentary that appeared in our 3/13 Technology Note. Security software stock now 18% off most recent 52 week highs. Dividend yield of 2.9%. On current 3 week losing streak which lost almost a combined 10%. Displaying "good" relative strength this week down 7.6%, as IGV is currently lower by 16.2%. Three straight positive earnings reactions up 12, 2 and 4.5% on 2/7, 11/8 and 9/6/19. Enter on pullback into long spinning top candle from 3/9. Entry NLOK 15.75.  Stop 14.

Cabin Fever? With the incessant chatter about the coronavirus, some have come up with their own "at home, indoor" names that they think will be shielded from the markets fragility. NFLX is one of those mentioned, just 6% off most recent all time highs, but has recorded three straight WEEKLY spinning top candles in the very round 400 number vicinity. When the herd gathers in numbers, sometimes it pays to monitor what is being overlooked on the other side. Perhaps when names in the "outdoor" arena look like they are possibly bottoming, with some kind of catalyst (remember we are not buying blindly), the tide is beginning to turn. No one rings a bell at the top, or bottom, but candlestick markers can help identify good risk/reward scenarios. Below is the current chart of WGO, that produced solid earnings reactions, rising 5 of last 6 times up 7.8, 13.2, 3.7, 13.6 and 4.6% on 12/20, 10/23, 6/19, 12/19/18 and 10/17/18. Friday gave market participants a glimmer of hope on the long side with a bullish counterattack candle at 200 day SMA support. Honor your stops though, as this market is merciless.

The delivery services space is a small tight knit group. There are just two major players in the group Federal Express and United Parcel Services. FDX which has been in a downtrend since the beginning of 2018 is now nearly half the market cap of UPS, because of that weakness. UPS which for the most part roughly traded sideways during that same time period, and was a leader against its largest rival, now looks vulnerable. There was some glaring relative strength for FDX last week, which was telling as FDX ROSE 2.9%, while UPS fell 2.8%. The ratio chart below is telling the story.