Biotech Strengthens, Techs In Ranges
The tradable techs
tried to come back Thursday, with the best performance put
in by Merrill Lynch’s basket of semiconductor stocks. But at
the end of the day, the majority of exchange-traded tech
funds remain range-bound. The Biotech HOLDR shows the
strongest uptrend among the tech-focused ETFs.
Exchange-Traded
Funds
The Semiconductor
HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) came charging back, gaining 4.1% on huge
volume and closing near the high of the day’s trading range.
This was a key test for the basket of chip and
chip-equipment makers. If the HOLDR’s component stocks and
their peers had failed to rally Thursday, the shorts would
have smelled blood in the water.
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Still, the
performance of many of the HOLDR components was less than
stunning. Intel
(
INTC |
Quote |
Chart |
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PowerRating) rose 5 to 135 5/8 but on average
volume. Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) rose 3 1/4 to 86
11/16, not enough to make up the prior session’s loss and
lower-than-prior-session volume.
The Nasdaq 100
Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating), referred to as the Cubes, rose
3.1% and formed a bullish engulfing pattern. However, volume
remained average. The stock and its index have moved
sideways too long to validate what had initially looked like
a double-bottom base with lows set on April 14 and May 24.
In a sound double bottom, the stock or index should pause
just briefly below the intermediate peak, then punch through
that resistance point, preferably on strong volume.
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The Financial
Sector SPDR
(
XLF |
Quote |
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News |
PowerRating) edged above its 50-day moving average.
A rally in this area would be a healthy sign, as it would
suggest the market has put aside concerns over interest
rates.
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The Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating) is acting more and more like a
leader. On Wednesday, money rotated from semiconductors into
the biotechs. On Thursday, the chip sector recovered, but
biotechs continued to advance, picking up 2.5%. This is an
industry moving at least partly under its own power.
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The profit takers
appear to have moved in following Mexico’s post-election
rally. The Mexico WEBS
(
EWW |
Quote |
Chart |
News |
PowerRating), which ran into its first
heads on Wednesday, tried to forge higher Thursday, then
gave it all back and them some, dropping 1.6% and forming a
bearish engulfing pattern.