The Russell Breaks Out and There May Be More Gains To Come

The Russell’s Big Bash (IWM)

Another day, another record –ok, almost.  The S&P 500 (SPY) closed a fraction below the record it set on April 30. Today’s big rally followed the blockbuster jobs report that came in well ahead of expectations. It fueled a rise at of about 1% for the S&P 500. But the real stars today were the small-cap stocks as signs that the US economy is not only healthy but may be strengthening.

The Russell 2000 finally broke out after weeks of watching it struggle around 1593, it finally smashed through it and jumped a full 2% on the day.

How big was the breakout today, it was tremendous. Look at this clean chart below with just one line on it –well two lines. You can see how the 1,590 region has been the source of significant resistance, with multiple failures. Well, today that was not the case, make no mistake this was a massive breakout in my opinion.

Where does it go next? I’m thinking 1,640.  I talked about this today as well in my video. Small Cap Stocks May Finally Be Breaking Out

russell, rut

Biotech (XBI)

The biotechs had a good day too and managed to bounce off technical support at $85.30. My hunch is it results in the ETF rising back to around $90.

biotech, xbi

AMD (AMD)

I made a minor adjustment to the AMD chart, but it doesn’t change my view. I still think the stock is heading to around $31.40.

amd

Amazon (AMZNWealth Strength IndexAMZN is Extremely Flat and trending Down)

Amazon finally got the boost it needs to get the stock heading towards $2,025.

amazon, amzn

Netflix (NFLXWealth Strength IndexNFLX is Extremely Down and trending Down)

What happens to stocks that don’t go down when the broader market is falling? They go higher, which is exactly what Netflix is doing now. The stock acted very well over the 2-day mini sell-off.   Could a big break out be on the way? Maybe.

netflix, nflx

Alibaba (BABA)

That Alibaba breakout is picking up steam and $201 is coming.

alibaba

JDWealth Strength IndexJD is Moderately Flat and trending Up (JDWealth Strength IndexJD is Moderately Flat and trending Up)

JDWealth Strength IndexJD is Moderately Flat and trending Up.com hasn’t broken out yet, but it seems to be coming.

jd

Qualcomm (QCOMWealth Strength IndexQCOM is Moderately Up and trending Up)

Qualcomm continues to go, and the stock is breaking out yet again! $100 appears to be on the way.  Man those options guys just keep nailing it!

qualcomm, qcom

Tesla (TSLAWealth Strength IndexTSLA is Flat and trending Down)

Well, amazingly Tesla was not only able to raise the $2 billion it initially set out to do but managed to up-size the deal. The biggest problem with the bear thesis or at least the calls for the stock to be worthless assumes that Tesla can’t raise the capital it needs to fund operations. But yet again, Tesla manages not only to raise what it initially needed but even more. Oh, and by the way, it would also seem that stock may have put in a bottom.

tesla, tsla

-Mike

This article first appeared on Mott Capital.

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