Stocks finished at an all time high on the S&P 500 as all news is good news continues to be the mantra. The S&P 500 finished up 0.72% and the NASDAQ 0.85% as the correction of a week and a half ago is now a distant memory. The swearing in of a government in Italy seemed to make markets happy as the Italian market jumped 2.2%. The European Central Bank meets this week and expectations are now high for a rate cut. The tech sector took the lead in U.S. markets Monday which would be a welcome development.
It looks like the channel that held for almost the entire time since mid November, is once again providing support for the S&P 500 – this would be good as it would help provide a downside marker. This is the 5th session the index has closed above it after the first detour below earlier in the month.
The NASDAQ – to the contrary – continues to be stymied by the same support line as it continues to hit it almost daily of late.
However this could change if we see a rotation into tech stocks. This sector has gone nowhere since the beginning of March even as the markets creep up, but today was a strong day in the sector.
We mentioned Apple (AAPL) in Friday‘s recap as a stock that could be poised to make a change in tone – it had a super day up 3% and ran all the way to its descending 50 day moving average. It also broke above its major downtrend line for only the second time since October 2012. If it can jump over this 50 day MA, and make a new higher high we might finally have the old Apple back – at least for a while.
Here are some other interesting charts per Dan Zanger’s Chartpattern newsletter:
Workday (WDAY) is a tech stock that has a descending channel that it just broke out of, a trader could partake with a stop if the stock falls back into the channel which would signify a short term failure.
Alexion (ALXN) is a company in the red hot biotech space – it is building a potential base here, and a new high would be a nice entry as Zanger points out.
ARM Holdings (ARMH) is another tech company – it reacted very well to earnings, now bulls want to see it form a “bull flag” (sideways for a few days) and then a breakout over recent highs, marking Zanger’s $46.90 buy point.