The bulls showed some signs of life on Friday as some indexes reclaimed key moving averages and others found potential areas of price support to bounce from. There is still a lot that needs to happen to feel comfortable that the bulls are back in control. The sell in May and go away theme is being stated repeatedly on the financial news networks and could still weigh on the markets. It will be interesting to see how this week plays out. We have some potentially sector moving earnings from MOS,DIS and NVDA this week. If the bulls can manage to take control we could have a vicious snap back in some pretty beaten down sectors. I have listed the indexes below that have the most interest for me starting with the weakest sectors and ending with the strongest sectors most recently.
![]https://elite.finviz.com/chart.ashx?t=XLP&ta=1&p=d&s=m)
XLP (Consumer Staples) have been the weakest sector out there and at some point these will start to look like attractive value plays. Typically big thick slow moving stocks but the index is testing potential long term price support on the weekly.. The stocks in this index are more long term hold investment type plays
IBB (Biotech) is One of the weakest sectors out there recently could be finding 100 as a floor nice bounce on Friday need some follow through has 50 day and 200 day over head as potential resistance
XLF (Financial) is another sector that has been especially weak lately but was able to reclaim the 200 day on Friday look to reclaim the 50 day
XLI (Industrials) Below the 200 day look to reclaim the 200 day and test the 50 day resistance
IYT (Transportation) is another space that has been struggling recently however it has managed to hold onto its 200 day moving averages bounced off it on Friday look for it to reclaim the 50 day
SMH (Semiconductors) Has been one of the strongest leading sectors that broke below the 200 day briefly reclaimed it on Friday and now testing the underside of a long term trend line NVDA earnings are this week and could be the make or break earnings report for the space the are several names in the space that could rally nicely > Look for potential resistance at the 50 day
XAR (Aerospace and Defense) another strong sector that manages to hold onto its 200 day after swift sell off> Iran news could give the sector a boost for some follow through off the 200 day bounce
QQQ (Tech) Specifically FANG has been weak lately but with the help of Warren Buffet adding 75 million shares over the last Qtr to his AAPL position announced on Friday gave the space a boost and it is one sector that managed to stay well above its 200 day reclaimed its 50 day on Friday could see a retest of new all time highs if we get some follow through
IWM (Small Caps) Through all the recent turmoil this sector has help up the best and now that we are through the bulk of the big boy earnings small caps will be reporting and if the bulls manage to retake control of the overall markets we could see this sector continue to perform nicely
XLE (Energy) This has been the strongest sector recently and it has had one heck of a run. If we see the bulls take control of the markets we could see money rotate out of energy and into some of the more recently beaten up sectors. This does not mean energy crashes back the lows but we could see some more consolidation or a slight pull back
"When it comes to macro events, you can either predict or react. I’ve proven time and again that my crystal ball is horrible, so my focus has to be on reacting to extremes in individual securities by selling at high valuations and buying at low valuations."
-Bruce Berkowitz
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This week Stocks to watch Video
$RMBS $WTW $AAXN $NGVC $APRN $SMSI $ZOES $RIG $ATOM $CPST $CVRS $LLNW $MBII $NIHD $NR $SMMT $CVSI $RCKT $RXII $MTCH $MOS $ATVI $BABA $TWLO $IPI $BZUN
Highly anticipated earnings
Source Earnings Whispers
Economic calendar
Source Bloomberg
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