STTG Market Recap April 22, 2014

We continue in this “V shaped” move off last week’s touch of the 200 day moving average on the NASDAQ.  The S&P 500 gained 0.41% and the NASDAQ 0.97%.  The indexes are nearing overbought near term so a day or two of rest would serve the bulls well to try to attempt a new leg higher.  In economic news existing home sales hit 4.59 million in March, versus a 4.55 million estimate.

In terms of the indexes the S&P 500 stalled at the trend line that connected the lows of summer 2013; some congestion lies ahead at year highs.

spx

The NASDAQ has come back from deeply oversold conditions as this index is heavy with biotech and momentum stocks.  The dotted blue line is the previous high; since early March we have not seen the NASDAQ make a new “higher high” which would be step one to a true reversal.  So watch that level closely.

nasdaq

In the healthcare space Allergan (AGN) – the maker of Botox and breast implants – jumped after Valeant Pharmaceuticals International proposed a merger.

agn

Gilead Sciences Inc (GILD) advanced 2.% in after hours after the drugmaker said its new $1,000 hepatitis C pill generated quarterly sales of $2.27 billion, helping the company’s quarterly net profit nearly triple.  This is one of the companies in the very hard hit biotech sector.

gild

The transportation sector hit a new high today which is a good sign….

tran

…stocks like United Airlines (UAL) led the charge.

ual

And we are seeing a return to momentum stocks such as Tesla Motors (TSLA).  If both momentum stocks and biotech stocks regain their mojo it would be bullish.

tsla

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