Skip to main content

Keep on Turning

The speculative stocks take a spin as the group rotation churns on -- will it ever end?

The Market

The sideways chop continues in the major indexes. But the improved breadth continues, as well. The McClellan Summation Index keeps on rising. The chart is shown below.

I know: You can’t find it in the big-cap stocks. You can find it in much of the speculative stuff that was hot back in January and February, but if the market is going to do this constant group rotation, then they must eventually rotate into that stuff, too. And Nasdaq had its first three-day winning streak since April. That’s a change. Yet, I can tell folks are frustrated. What had been working for April and part of May has stalled out and is no longer working. What had worked in the rally off the late May lows has stalled out in recent days, as well (see the Semis). And breakouts have had very little follow- through.

That’s the market we’re in. I think it is unlikely to change. At some point sentiment, which has bordered on giddy but hasn’t quite gotten there, will get there. At some point breadth will weaken and will cause the indicators to roll over. Right now we have a market that is short-term overbought, and I think that’s why we see what feels like the never- ending chop.

New Ideas

With Prime Day coming later in the month, I was asked if I thought today was the start of a move up in Amazon (AMZN:Nasdaq). Prime Day or not, Amazon has gone nowhere for almost a year (this is a nine month chart). It is the same price it was in September, so I’d say as long as it holds over that $3,150-$3,200 area, I see no reason it can’t work its way upward, especially if it can get over that top line (around $3,300).

Image placeholder title

I am still a fan of United Airlines (UAL) - Get Free Report. I would like to see it get back up over $60 sooner rather than later.

Image placeholder title

Finally, I was asked to follow up on IBB (IBB:Nasdaq), an exchange-traded fund for biotech stocks that I have liked for some time and finally—thanks to the Biogen (BIIB:Nasdaq) rally yesterday. I would be inclined to take some profits here. I think it can breakout over $160, but when the market gives you a gift you should book some profits on a portion.

Image placeholder title

Today’s Indicator

The McClellan Summation Index is discussed above.

Image placeholder title

Q&A/Reader’s FeedbackHelene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

Five9 Inc (FIVN:Nasdaq) looks like a big top to me. But if you want to buy it down here then at least you know exactly where you are wrong: under $150.

Image placeholder title

Merck’s (MRK) - Get Free Report chart went from so promising to uh, oh in the course of a few weeks. I think it should bounce off that line, so that $71 area should hold.

Image placeholder title

Tradeweb Markets (TW:Nasdaq) hasn’t done anything wrong, but it has been going sideways for two months. I would respect a breakout in either direction, but I’m not so sure it is going to break. Right now it is smack in the middle of the range.

Image placeholder title
Dow is the Most Vulnerable to Profit Taking

Dow is the Most Vulnerable to Profit Taking

Despite the newfound focus on the Dow Jones Industrial Average last week, it turns out we may be seeing the last gasp of outperformance here.

How Hungry Is This Market?

How Hungry Is This Market?

Here's what I'd like to see happen with this rally -- I'd like it to show some FAANGs. Here's why -- and a look at Microsoft's chart, news highs and more.

Sloppy With a Chance of Rallying

Sloppy With a Chance of Rallying

Here's why I see another rally before the weekend, even amid the messiness, and a bump for Amazon.

Sloppy With a Chance of Rallying

We Can Rally Just a Bit More

Energy stocks have a lot of complacency in them.