Watch for Higher Lows in These Three Tech Stocks

Dave Keller, the chief Market strategist at stockcharts.com, welcomes viewers to the final bar on Monday, May 13, 2024. He discusses the day's market action, noting a quiet day for the S&P 500 and a slight rise for the NASDAQ. Technology leads the sectors, with utilities and real estate also performing well. Dave mentions his recent experience at the Money Show and teases an upcoming segment on relative strength characteristics, focusing on utilities and technology. A poll question about Bitcoin's future value is addressed, and the current state of Bitcoin is analyzed, noting its support level at 60,000. Market averages are reviewed, with mixed results and the VIX indicating some uncertainty.

The script delves into the performance of various sectors, highlighting the strength of technology and the relative weakness of industrials and financials. Dave discusses the interest rate environment and its impact on different sectors, particularly technology. He also touches on the performance of cryptocurrencies, with Bitcoin's price just over 63,000. A detailed analysis of the S&P daily chart is provided, comparing current market conditions to previous trends. The potential for a bearish momentum divergence is considered if new all-time highs are reached on weaker momentum.

Dave examines the advanced decline lines for different cap tiers on the New York Stock Exchange, noting that they have reached new highs, which is a bullish signal. He contrasts this with the S&P, which has not yet reached new highs. Gold's performance is discussed in detail, with a focus on its technical breakout and the potential support level at 2,300. The GLD fund's performance is also analyzed, and the overall momentum for gold is seen as strong despite a recent pullback.

The script shifts to the healthcare sector, with a focus on the pharmaceutical stock Madna. Dave discusses the concept of resistance becoming support and the importance of breaking above key resistance levels. He outlines various patterns that could be inferred from Madna's chart, such as an ascending triangle or a head and shoulders bottom. The breakout above resistance at 115 is highlighted as a positive signal, with further upside potential if the stock can maintain its position above this level.

Dave expresses concerns about momentum divergence, particularly with stocks like Amazon, which could indicate that the current uptrend may be nearing an end. He discusses the importance of big names like Apple, Amazon, and Meta in pushing the S&P and NASDAQ to new highs. Charts of Apple, Amazon, and other stocks are reviewed, noting the need for these stocks to show significant gains to confirm a continued uptrend. The script also touches on breath conditions and how they are improving, with many stocks in the S&P making new highs.

The script concludes with a brief analysis of airline stocks, such as American Airlines, and their short-term moves. Dave notes that while these moves are constructive, there is still significant overhead resistance to consider. He emphasizes the importance of reviewing market breadth conditions regularly and provides announcements about upcoming webcasts and the invitation for audience questions. The 'It's All Relative' segment is introduced, focusing on relative strength and performance, with a particular emphasis on defensive sectors like utilities and consumer staples.

Dave discusses the Relative Rotation Graph (RRG) and its implications for sector performance. He notes the strength of defensive sectors like utilities and consumer staples, which have rotated into the improving quadrant. The script highlights the unusual rotation of the utilities sector and its recent performance. Dave also reviews the relative strength of different sector groups, including growth sectors like technology and consumer discretionary, and value sectors like industrials and financials. The performance of specific utility stocks, such as CEG and VST, is analyzed, noting their significant gains and the potential red flags they present.

The final paragraph focuses on the technology sector, specifically the company AppLovin, which has shown remarkable growth. Dave describes the stock's pattern of breakouts and gaps higher on earnings, suggesting that the stock tends to show strength following these events. He emphasizes the importance of relative strength in stock selection and encourages investors to consider underperforming sectors if their charts indicate potential for growth. The script concludes with a reminder to watch for more content and a prompt for viewers to like, subscribe, and engage with the channel.