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The S&P 500 ($SPY) just continues to grind higher, but that grind may be coming to a halt, because the index today very quietly broke out late in the afternoon. One of the most active groups around continues to be the chipmakers ($SOXX) which just continues to rise, while Biotech ($IBB) shares also look like they are about to get into party mode again.
Nvidia’s stock ($NVDA) continues to struggle to rise above the $192 level, while Alphabet ($GOOGL) closed right at an all-time high. The big test to confirm a broader market breakout will be watching shares of Amazon ($AMZN), with the stock struggling around $1,000.
S&P 500 Breakout
The breakout in the S&P 500 was in such a subtle way it was hardly noticeable, but it happened as the chart below shows. One can see how the index closed just above resistance that had formed around 2,550. The last breakout occurred around 2,507, and the S&P proceeded to add on about 45 points. A move of 45 points from here adds about 2 percent to the index, and take it right to 2,600.
S&P 500 Breakout by Scorpio244 on TradingView.com
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Nvidia Stumbles Again
The buyers are trying hard to get Nvidia to breakout, but to this point they just can’t break through. The stock continues to get held at levels below $192, and the biggest problem is the buyers may be running thin. Just look at the decline in volume over the last two days.
NVDA by Scorpio244 on TradingView.com
Chipmakers Surge
What also seems concerning for Nvidia, is the rest of the sector rose today. The PHLX SOXX ETF surged higher today and was even making new highs. It would seem all the concerns surrounding the Apple’s ($AAPL) iPhone production issue and the impact on the chips has died down or should have never even existed.
soxx by Scorpio244 on TradingView.com
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Biotech
The biotech ETF, IBB, also looks set to rise, as it moves closers to mid-August uptrend line. The ETF has consolidated nicely and is presently forming what looks like a symmetrical triangle, or a potential pennant. Either way, it is a bullish pattern, and that would suggest a breakout is likely on the horizon. Any rise in the shares brings it close to or above $343 resistance.
IBB by Scorpio244 on TradingView.com
Amazon
Amazon shares have been struggling to rise above $1,000, but that could change soon as well. The stock has been part of a group of companies that have been at the heart of the 2017 rally, and the market will need Amazon to rise as a sign of the health for the market. A rising market without Amazon could be a sign of underlying weakness.
AMZN by Scorpio244 on TradingView.com
Alphabet
Alphabet managed to get over $1,000 today, closing right near an all-time high. A move in the stock above $1010 is a clear break higher and symbolizes a breakout.
Google by Scorpio244 on TradingView.com
Technology
Technology ($XLK) continues to be something to watch, the ETF moved out of the upper range of the channel again, and in the past, this has signaled it was overbought. It is likely the ETF could rise further, but it also likely means the sector is in danger of running too hot. Preferably we would like to see it stay within the channel.
Tech by Scorpio244 on TradingView.com
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Michael Kramer and the clients of Mott Capital own shares of Alphabet
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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Tags: Technology, Biotech, Nvidia, Alphabet, Amazon, Chipmakers, Technology
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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