Stocks: The Good, The Bad and The Ugly

S&P 500 swaps, mid-caps hitting 52-week highs and more bottoms and bases

Good morning,

There is just one constituent swap for this quarter’s S&P 500 rebalance. On June 20, DISH will drop down to the S&P 600, while Palo Alto will be promoted to the S&P 500. While I think the committee does a good job over the long term, these swaps have a reputation for being short-term contrarian indicators.

This week we’ll look at the setup for both those stocks, as well as:

• Bases in the Nasdaq 100

• Mid-caps hitting 52-week highs

• Industrials snapping back

• Bottoming patterns in some beaten-up stocks

• The 3 best performing large caps over the past week

• and more

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S&P 500 swaps

DISH is out

Is it happening? It’s very short-term, but DISH has broken higher from a one-month base with a bullish momentum divergence. The stock hasn’t been able to hold above its 50-DMA for more than a few days the whole way down, but the stock may be worth keeping an eye on.

PANW is in

PANW was already breaking out to 52-week highs when this weekend’s news propelled the stock even higher. However, the stock got sold hard on Wednesday as tech stocks and previous leaders moved lower throughout the day. Rotation is in the air (more on that Monday) so there’s near-term risk of this swap becoming contrarian. But if the breakout can hold, this base measures to $280.