THREE DOW INDEXES HIT 52-WEEK HIGHS -- HEALTHCARE GETTING STRONGER -- BIOGEN BREAKOUT -- JNJ TURNING UP

RATE-SENSITIVE STOCKS HAVE A GOOD DAY... In a bullish display of unanimity, all three Dow averages hit new 52-week highs today. On a percentage basis, the biggest gain was seen in the utilities. That have may have to do with the fact that rate-sensitive stocks were market leaders today. The Dow was led higher by Citigroup and JP Morgan which was reflective of strong gains in financial stocks. Homebuilders also had a strong day. After correctly downward recently, most of the homebuilders climbed back over their 50-day moving averages today. Sector leadership was also seen in the healthcare sector from rising biotechs and pharmaceuticals. Johnson & Johnson was one of the Dow's top gainers. Some profit-taking was evident in the telecom and technology sectors. Semiconductors lost some ground. Intel was the Dow's weakest stock.

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DOW JONES COMPOSITE INDEX NEARS NEXT TARGET... The Dow Jones Composite Index contains all 65 stocks in the other three Dow averages -- the Industials, the Transports, and the Utilities. The weekly bars show the index moving to within 2% of its early 2002 peak near 3110. That will be another important test for the market. Chart 5 shows that the Dow Industrials are within 50 points of their early 2002 peak at 10673.

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HEALTHCARE GETTING BETTER... The healthcare sector is another 2003 laggard that's starting to look stronger. Chart 6 shows the AMEX Health Care Select Sector SPDR (XLV) moving up to challenge the high formed last June. The relative strength line along the bottom shows that the group underperformed the S&P 500 for most of last year. Since November, however, the RS line has started to move higher. That's usually an early sign that a lagging group is starting to benefit from sector rotation. Just last week, the biotech index group hit a new high for the year which is giving the sector a boost. Pharmaceutical stocks are also starting to show some bounce.

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BIOGEN BREAKS OUT... Chart 7 shows that Biogen Idec has just cleared chart resistance at its June high which constitutes a bullish breakout. The rising relative strength line under the chart shows the stock rising faster than the Biotech Index. That makes it a biotech leader.

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JOHNSON & JOHNSON NEARING BREAKOUT... JNJ was one of the percentage leaders in the Dow today. The daily bars show the drug stock jumping over its 200-day moving average. Upside volume over the past couple of days has shown improvement. The stock may be on the verge of breaking through its November peak near 53. That would constite a bullish breakout. The weekly bars in Chart 8 show a stock close to hitting a six-month high. The weekly RSI line has crossed over 50 which is a sign of strength. And, the weekly MACD lines are positive.

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