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Biotech Stocks Breakout, Plus Roku, Technology, Oil, Inflation, Banks

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Biotech stocks have quietly broken out, and the Nasdaq Biotech ETF ($IBB) is trading above $107. We have been watching the IBB ETF now for a couple of weeks waiting for this breakout to happen and it has. That is a big deal, and it could mean the ETF is about to rise further, perhaps all the way back to around $114, an increase of about 6.5 percent.

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The rise in the iShares Biotech ETF ($XBI) confirms the breakout in the $IBB ETF. The XBI ran into some resistance around $85.75.

But the XBI setup on the 5-Minute chart looks relatively stable, and it would also suggest a rise in the XBI is likely not stalling out yet.

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Look at the rise some of the stocks in the XBI ETF over the past ten days.

Data Compiled from Ycharts

Technology Stocks

Technology stocks may be getting set for a bounce, the Technology ETF $XLK has found support around $64 and could use this support as a place to rebound and move higher, perhaps to about $65.

Alphabet ($GOOGL) is showing signs of a potential breakout on the way with a symmetrical triangle forming.

Roku

The share of Roku appears to be continuing to deteriorate on a technical basis as well. The relative strength index continues to decline, while volume continues to evaporate. The trend seems to be turning negatively as well, and the stock has one last area of support at the uptrend line, around $52, a move lower from their seems the stock down.

Roku is nothing more than a product that will become commoditized; it is not a streaming media play in my opinion. The winners in the space will be the content creators. The advertising on the platform does not seem that great, within my experience, ads only seem to run before games on Roku. Additionally, competition will continue to increase from players like Amazon, Alphabet, and Apple. My thoughts on Roku.

Banks, Inflation, and Oil

The banks keep rising, but it makes no sense in some regards but does in others. A cut back on regulations will surely help the banks, while corporate tax cuts will help earnings. But for now, the yield curve continues to show pressure and continues to contract. The 10-year minus 2-year spread is continues to fall, and is around 0.6%.

But the bank stocks continue to rise, telling us either the bond market is getting it wrong on inflation and US Economic growth. Or the equity market merely is too bullish, letting deregulation and tax reform drive the stock prices higher.

You have likely seen this chart here before, but where Oil goes so does inflation.

Well, Oil is on the verge of a significant breakout, one that could send it on towards $75. What does that mean for inflation? Do you want to guess?

Night!

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Michael Kramer and the Clients of Mott Capital own shares of GOOGL

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Tags: #biotech #inflation #technology #banks #roku #oil