Google is making a run at a big fat round number - 1200 -- which would also be a new all-time high, and time is of the essence to get aboard what could be a rocket ship ride much, much higher. We don't have much time to waste so I'll just cut right to it.

The roughly 15% rally in the Nifty Pharma Index that's occurred over the last four weeks has a lot of people asking "was that the bottom?". In an attempt to answer that question I'll be looking not only at the index itself, but at its 10 components as well.

Before we get into that though, I think it's important to understand how this index is constructed. Despite there being 35 pharmaceutical stocks in the Nifty 500, the Nifty Pharma Index only has ten stocks in it that make up roughly 80% of the industry's market capitalization. Situations like this are why we use equal-weighted indexes to get a better idea of what stocks in this industry are doing, as only looking at the cap-weighted index which is dominated by large-caps can mask the positive or negative relative performance of its mid and small-cap companies.

But today we're talking about the cap-weighted index performance, so let's get right into it.

So JC calls me up today and drops this in my lap on Deutsche Bank $DB:

I think this is it. I think the bottom is in. Either that or it's a zero.

LOL.

More professionally, JC is quoted in Barron's:

When you talk about the fundamentals of these banks, then people get really scared, but there comes a certain point where that horribleness gets priced in.

I'm rarely, if ever, a bottom-feeder in the stock market. But knowing that $DB is just too big of a name to allow to go bust (I think regulators learned their lesson with Lehman Brothers?), it seems like a low-risk, potentially high reward play to dip our toes in the water in a risk-defined play to participate in a rebound.

Sector rotation has been a hot topic as this bull market keeps finding fresh legs to pull us higher. As we scan the entire marketplace looking for clues as to the next sector to wake up, we've identified the Home Builders as a viable option with some clearly defined levels to keep it simple.

It's time to Roll with the Homies.

Mid and small-cap stocks have been under-performing their large-cap counterparts as of late, however, it's important to remember when looking at an index that it's basket of stocks and therefore looking at each of the components can unearth great opportunities. Yesterday we did a deep dive into mid-cap stocks for long opportunities, so today we're following that up with a look for similar setups in small-caps.

Before we get into individual stocks, I want to highlight the potential failed breakdown that we're watching in the index itself. Last week prices undercut the March lows as momentum diverged positively. If we can get back above 8,040, it would confirm a failed breakdown and likely be the catalyst to push this market to new all-time highs. The individual names within this index remain mixed, so a neutral stance remains appropriate in the index itself until this range resolves itself.

From the desk of Tom Bruni @BruniCharting

If you've been reading this blog you've probably noticed a lot of posts about the areas of the market showing relative strength, like Technology and Consumer Discretionary, however, one industry not getting as much attention is Airlines. The reason for that is simple; the Dow Jones Transportation Index is sitting roughly 3% off all-time highs within a strong uptrend, however, Airlines continue to struggle to gain any altitude, sitting at 52-week lows on an absolute basis and crashing on a relative basis.

Mid and small-cap stocks have been under-performing their large-cap counterparts as of late, however, it's important to remember when looking at an index that it's basket of stocks and therefore looking at each of the components can unearth great opportunities. In this month's (Premium) Members Only Conference Call we spoke about the strength in the Financial Services, Information Technology, Consumer Goods, and Energy sectors, so this is a follow-up post looking at the mid-cap stocks, many of which are in these sectors, that we want to be buying.

Americans love their burgers. And customers around the world love American iconic brands. These two forces are unlikely to change in the near future, and thus sales at McDonald's restaurants around the world should continue to be strong. Of course, I couldn't care less about the fundamentals. I'm just watching price action and volatility and see a nice opportunity to profit shaping up in the options market for $MCD this summer.

Monday afternoon I was down in San Francisco, so I went by the Bloomberg West studios to do a quick hit with Catherine Murray. She asked me about the S&P500, Technology, Financials and the underperformance of Consumer Staples. We also discussed sector rotation and Crude Oil during the segment.

Here is the interview in full:

From the desk of Tom Bruni @BruniCharting

Despite the higher highs and higher lows in the major indices, all-time highs in riskier assets such as micro and small-cap stocks, and fresh breakouts in leading sectors like Technology and Consumer Discretionary, there continues to be a subset of market participants who fight this rally.