Morning Update-BTK,NDX,SML,SPX
The Biotechnology Index (BTK)-Daily chart
Today I want to cover the Biotechnology index because as you are probably aware, the main theme in our current portfolio are the Bio-pharma stocks. As you can see by looking at the daily chart of the BTK it is in an ascending triangle breakout and experiencing a pullback of its recent highs placed at 733.95. Furthermore, it has over shot the back test line at 725.70. However the BTK remains in a bullish trend reversal; indicators and oscillators are bullish. Despite the weakness in this index, it remains the best sector. GPRO, CEPH, CELG, and NBIX are our main picks for this sector and they too are in a pullback of their respective highs. I am bullish on this sector and on these stocks despite their volatility.
The Nasdaq 100 (NDX) - Daily chart
The NDX is currently the worst sector. If you look at the chart going back to April 2005, you can see that the NDX has been trading in an uptrend channel for a year now. The NDX has held it's uptrend line for the past year. As you can see from the chart, the lows held in April 2005 at 1394.90 and then the lows held in October 2005 at 1515.40. Furthermore, the NDX previously has rallied smartly off of those lows and remains in the uptrend channel. You can see that the NDX is once again close to the trend line. What I want to point out here is that since the previous two times that the NDX corrected, it held those lows; do you really want to short the lows?
The S&P 600 Small Cap Index (SML) - Daily chart
The daily 6 month chart of the SML illustrates remains in an uptrend channel. Today the SML hit the uptrend line at 367.82 and bounced back to close green at 371.84 on good volume. The Aroon is in a bullish trend reversal although the PPO and stochastics are pulling back.
S&P 500 chart (SPX) - Daily chart
Nothing has really changed. Today the SPX hit the uptrend line at the lows at 1268.42 and bounced off of there nicely to close up at 1278.47. The SPX Target still remains higher at 1304 upwards to as high as 1334, higher end most likely. Stocks are acting well even though things seem treacherous. The market just needs a little more time to bounce from here.
Remember: Don't Rat brain and sell your winners in order to average down on your losers.
