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Market Update

The Nasdaq has outperformed the rest of the indices followed by S&P 500, Dow Jones and the Russell 2000.

This could suggest an on-going leadership back to tech and growth stocks for another leg up. However, it is worth to note that only the large cap tech and growth stocks are outperforming last week while a lot of other small and mid cap growth stocks entered into a pullback mode.

Another red flag for this all-time-high market is the market breadth is deteriorating, e.g. the percentage of stocks above 50 and 150 MA are getting lesser and lesser while the market is hitting all time high. This is a divergence that is worth to pay attention to.

I'm watching out for tell-tale signs for any potential change of the trend for S&P 500 and NASDAQ. So far, they are still going up and bullish.

Growth Stocks Proxy

One of the growth stocks proxies that I track is ARKK ETF. A month ago (when I first covered rotation back to growth) I mentioned that outlook is still not clear and ARKK needs to commit above the intermediate resistance around 115 to continue to trend up. Refer to the daily chart for ARKK below:

ARKK Daily Chart

Despite having a few reactions from the resistance 115, ARKK showed bullish characters and successfully overcome it and tested the upper part of the trading range at 130.

Right now it is having a reaction after a few rejections from the resistance at 130. Supply is generally on the low side and the reaction is not yet threatening. As the reaction is still unfolding, it is essential to keep monitoring to wait for confirmation. I anticipate supply absorption pending a breakout of the resistance and trend higher to test 140, 150.

For the time being, tech and growth stocks (or the oil stocks) could still outperform the market. Check out the stocks to watch this week below with potential setup ahead.

US: 3 Tech Stocks Set To Break Out and Make Big Gains — CALX, COMM, DXC

While the big cap stocks in the technology sector are on the spotlight, these 3 stocks - $Calix Networks(CALX)$ , $CommScope Holding Company Inc.(COMM)$ , $DXC Technology Company(DXC)$  set to breakout and rally higher with plenty of upside ahead. Watch the video below:

Further Reading

Adjust & Adapt under the Great Sector Rotation?

Tech/Growth Stocks are Booming and How to Manage The Volatility

NIO: Potential Wyckoff Accumulation Phase D with Point & Figure Price Target Projection