The NASDAQ Composite Index churned on heavier volume yesterday but remained above its 50-day moving average, along with the Russell 2000. Meanwhile, the S&P 500 Index continued to churn below its own 50-day moving average in what remains a five-day rally attempt off of last week's lows by all the major market indexes. Futures are down pre-open on negative news out of Egypt, Europe, and China, but trade will likely slow on a short trading day going into tomorrow's Fourth of July holiday.
The daily chart of Celgene (CELG) shows a small head and shoulders formation with the stock pushing up into its 50-day moving average on below-average volume. Given that the market continues to rally on an oversold bounce from last Monday's lows without a follow-through day, the potential for a rally failure still exists. Should this occur, we might expect CELG to find resistance around current price levels and roll over with the market. A strong push through the 50-day moving average of 3-5% would be your maximum upside stop.
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