A positive end again for the markets puts the major indexes back at their previous highs. The NASDAQ resumed leadership again as tech bounces back. The leadership in the scans on Friday were a case of catch up after the decline on Wednesday. As we discussed on Thursday the following leadership below continues to offer opportunities looking forward.
Healthcare is still one of the leaders and uptrend off the test at $59.50. The parts have been solid with IHF, XPH, IHI and IBB offering solid moves to the upside.
Technology still moving sideways and looking for the lost leadership. XLK made a solid move tot he top of the current trading range to close the week and watching today to see how it opens. SOXX still showing a rounding top and moved below the 10 DMA and testing the 20 DMA. IGN moved back to the current high and a break above $35 is of interest. IGV holding in the current uptrend off the May lows. The pennant pattern is worth watching for the upside to continue. FDN is stalled on the move higher and resistance at the $59.30 level currently. Still watching to see how this unfolds.
Consumer Discretionary (XLY) is in a wedge consolidation pattern the last there weeks. Retail (XRT) has been the challenge with pressure on discretionary income from gasoline, taxes and food costs. Watching for the deciding outcome and the bias is towards the upside currently.
See the weekend outlook for more on other sectors to watch.
Running the EGG Scans – First the daily winners…
DRN (real estate) popped back after testing support. Is this sector ready to resume the upside? Remains a question mark as interest rate volatility is playing with the sentiment towards the sector, but showed solid move higher on Friday.
TNA (small caps) made up for lagging earlier in the week, but still remains challenged by the growth outlook for the economy. Despite the confidence of the Fed the data isn’t supporting those numbers. Still worth watching the trade upside.
DGAZ (short natural gas) lower demand projections push commodity lower along with oil (DTO short oil ETF). UNG fell and testing the May lows. Downside is in play for now.
RUSL (Russia) still moving higher in the uptrend with testing along the way. Low volume buying on Friday, but watching to see how it unfolds.
NASDAQ 100 (QQQ) positive move to end the week and post a new high. Large cap technology stocks led the way and worth watching as we start the new trading week.
EGG Model Scan Watching…
There is some rotation, but the indexes are consolidating in place. There have been some solid leaders, but we need confirmation of the upside to continue and patience to let it all evolve. Alternative energy, energy, healthcare, technology and small caps have been leading. Commodities have made a solid run of late with gold and silver moving higher. The ripple effect is the miners moving higher as well. Base metals have been moving again. Agriculture is starting to move higher from a base and worth watching. Bottom line… patience as this all unfolds going forward and the opportunities present themselves.
No Current Egg. Risk/Reward of our scans are not in the parameters we set based on current market conditions.
YINN (FXI non-leveraged) is set up with potential entry at $26.85, but declining volume on the buying is a concern. Patience for now – watching how today unfolds.