Momentum Monday – New All-Time Highs Ahead?

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Bull markets often correct through sector rotation. When many leading enterprise software stocks were hit last week, the market averages didn’t skip a beat. The money just rotated into other sectors – semiconductors, energy, financials, retailers, biotech.

The dips are still welcomed as buying opportunities by many. The S&P 500 and the Nasdaq 100 are less than 2% below new all-time highs. The U.S.-China trade deals seems to be priced in. In other words, expectations going into the next earnings season, which starts next week, are high so companies better not disappoint.

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Swing Trading with options – How to Trade Big Trends for Big Profits

Top 10 Trading Setups – How to find them, hot to trade them, hot to make money with them.

Notable Relative Strength In Uniqure

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In late February, after Roche paid a hefty premium to buy Spark Therapeutics (ONCE) for $4.3 Billion. The acquisition ignited a rally in the entire gene therapy industry. Uniqure (QURE) gained 50% in a day going from $40 to $60. It is still considered an acquisition candite. Its current market cap is $2.3 Billion.

After the gap, QURE consolidated through time for a few days. Then, it broke out again and it quickly ran to $70, only to retrace back to $60, where buyers are stepping up again today. While most momentum stocks are under pressure today, QURE is up more than 4% and it is perking up from a tight range contraction zone. This is a notable relative strength and a sign of institutional accumulation, which bodes well for higher prices ahead.

Check out my latest trading books:

Swing Trading with options – How to Trade Big Trends for Big Profits

Top 10 Trading Setups – How to find them, hot to trade them, hot to make money with them.

Momentum Monday – Market of Stocks

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The dips continue to get bought for the most part. The major large-cap U.S. stock indexes, QQQ and SPY spend the last couple of weeks in a tight consolidation and are potentially getting ready for another leg higher.

Market breadth is still healthy. We see strength in restaurant stocks like CMG and MCD, fashiology names like LULU, NKE, and AAPL, digital payments, biotech, emerging markets, China, etc.

One of the main warning signs right now is the continued underperformance of small-caps. Russell 2000 is still struggling below its 200-day moving average. The other worry is the coming massive wave of supply via new monstrous-size IPOs like Lyft, Uber, Pinterest, and others.

Check out my latest two trading books:

Swing Trading with options – How to Trade Big Trends for Big Profits

Top 10 Trading Setups – How to find them, hot to trade them, hot to make money with them.