Technically speaking, the major U.S. benchmarks continue to grind higher amid persistently bullish, and increasingly consequential, February price action.
On a headline basis, the S&P 500 has extended a mid-month technical breakout — placing distance atop its 200-day moving average — while the Nasdaq Composite has registered its first close slightly atop the 200-day for the first time since Nov. 8. Though sustainability and follow-through remain open questions, the tandem breakouts raise the flag to a primary trend shift.
Before detailing the U.S. markets’ wider view, the S&P 500’s
hourly chart highlights the past two weeks.
As illustrated, the S&P has extended its break atop the 200-day moving average, currently 2,745.6, notching four straight closes atop the primary trending indicator.
From current levels, the 2,762 area pivots to support, and is followed by the firmer breakout point, circa 2,742.
Similarly, the Dow Jones Industrial Average has knifed to two-month highs, confirming its uptrend.
Tactically, near-term support (25,626) is followed by a more significant floor matching the June peak, circa 25,400.
Meanwhile, the Nasdaq Composite
has reached a headline technical test.
Specifically, the index is challenging its 200-day moving average, currently 7,467.5, closing last week slightly higher for the first time since Nov. 8.
As always, the 200-day is a widely-tracked longer-term trending indicator. A posture higher generally signals a primary uptrend.
The Nasdaq’s recent persistence near the range top improves the chances of an eventually more decisive breakout.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq is challenging major resistance. Familiar inflection points stand out:
- The three-month range top, defined by the December peak of 7,486.
- Major resistance at 7,474.
- The 200-day moving average, currently 7,467.5.
Against this backdrop, last week’s close (7,272) effectively matched resistance (7,274), and an extended retest remains underway. Still, the weekly close atop the 200-day moving average, combined with Tuesday’s early follow-through, raises the flag to a primary trend shift.
Looking elsewhere, the Dow Jones Industrial Average has paced the 2019 market rally.
Consider that the Dow cleared its 200-day moving average to conclude January, and has subsequently taken flight. Tactically, last week’s close (25,883) matched a former inflection point at the late-August gap (25,882).
On further strength, the December peak (25,980) is followed by an inflection point in the 26,180-to-26,190 area.
Meanwhile, the S&P 500 has also extended a break to two-month highs.
Tactically, the 2,773-to-2,775 area remains an inflection point —matching the top of the December gap — and is followed by major resistance at the early-2018 range top (2,802).
The bigger picture
As detailed above, the U.S. benchmarks’ bigger-picture backdrop continues to strengthen.
On a headline basis, each big three U.S. benchmark has reached two-month highs, confirming its intermediate-term uptrend.
Perhaps more notably, key primary trends are also under siege. To reiterate, the S&P 500 has registered four straight closes atop the 200-day moving average, while the Nasdaq Composite has notched its first close atop the 200-day since Nov. 8.
Moving to the small-caps, the iShares Russell 2000 ETF has extended its rally attempt amid a volume uptick.
Consider that the 200-day moving average, currently 157.87, is increasingly within view. The 200-day has capped the small-cap benchmark since Oct. 10.
Meanwhile, the SPDR S&P MidCap 400 has edged atop the 200-day moving average, currently 347.52, closing higher for the first time since Oct. 9.
Tactically, significant resistance matches the range top (349.27) and the pending retest should bea a useful bull-bear gauge.
More broadly, the mid-cap benchmark has reached four-month highs, while the small-cap benchmark has tagged three-month highs.
Against this backdrop, the SPDR Trust S&P 500 has placed distance atop the 200-day moving average, currently 274.30.
Tactically, the 200-day closely matches the May peak (274.25) and pivots to support.
Conversely, the December peak (280.40) is followed by the firmer range top, an area spanning from 281.15 to 281.22.
Placing a finer point on the S&P 500, familiar inflection points stand out:
- Major support matching the May peak of 2,742.24.
- The 200-day moving average, currently 2,745.60.
To reiterate, the S&P has registered four straight closes atop the 200-day, extending the breakout to conclude last week.
From current levels, major overhead matches the early-2018 range top (2,802), and is closely followed by the post-breakdown peak — the 2,815-to-2,817 area.
Conversely, significant support, circa 2,742, is followed by the familiar 2,710 mark.
Beyond technical levels, the S&P 500 has confirmed its intermediate-term uptrend, and the recent rally atop the 200-day moving average raises the flag to a primary trend shift. All trends technically point higher, based on today’s backdrop, pending signs of a bearish pulse.
Tuesday’s Watch List
The charts below detail names that are technically well positioned. These are radar screen names — sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.
Drilling down further, the SPDR Shares Gold ETF
is digesting a recent break to nine-month highs.
Technically, the shares concluded January with a bull-flag breakout, rising amid a golden cross, or bullish 50-day/200-day moving average crossover.
The subsequent pullback has been comparably flat, fueled by decreased volume.
Tactically, resistance matches the range top (125.23) and the shares have ventured higher early Tuesday. A near-term target projects to the 127.50 area.
Conversely, the major support broadly spans from about 122.40 to 123.20. Gold’s uptrend is firmly intact barring a violation.
Meanwhile, the SPDR S&P Retail ETF — profiled twice last week — has broken out.
The upturn punctuates a tight six-week range, a coiled spring, laying the groundwork for potentially material follow-through.
Tactically, the breakout point (44.90) pivots to support and is followed by the 50-day moving average, an area that has recently defined the trend. The group’s recovery attempt is intact barring a violation.
Similarly, the iShares Nasdaq Biotechnology ETF has staged a modest breakout.
The upturn punctuates a modified head-and-shoulders bottom, defined by the November, December and January lows.
The pattern’s neckline matches the 200-day moving average, currently 110.55, and pivots to support. The group’s technical bias points higher barring a violation.
More broadly, the U.S. sub-sector backdrop has strengthened in recent weeks, and continues to make progress, as partly detailed above.
Moving to specific names, Intel Corp.
is a Dow 30 component coming to life. (Yield = 2.5%.)
Specifically, the shares have knifed to six-month highs, placing distance atop the 200-day moving average.
Underlying the upturn, Intel’s relative strength index (not illustrated) has registered its best levels since June, improving the chances of longer-term follow-through.
Though near-term extended, and due to consolidate, the shares are attractive on a pullback. Tactically, the breakout point, circa 50.00, is closely followed by the 200-day moving average, currently 49.16.
Initially profiled Jan. 7, Netflix, Inc.
has returned 13.2% and remains well positioned.
The shares started January with a decisive breakout, knifing atop trendline resistance and the 50-day moving average.
By comparison, the ensuing pullback has been flat, punctuated by a mini cup-and-handle defined by the late-January and February lows.
Tactically, the range top matches the Feb. 5 and Feb. 12 peaks — both precisely 360.00 — and is under siege to start this week. A near-term target projects to the 382 area on follow-through.
Finally, Chevron Corp.
is a large-cap oil and gas name showing signs of life. (Yield = 4.0%.)
Earlier this month, the shares knifed atop trendline resistance, rising after the company’s fourth-quarter results.
The subsequent tight February range is a continuation pattern, positioning the shares to build on the initial strong-volume spike.
Tactically, the range top matches the 200-day moving average, currently 119.50, an area that has capped the shares since October. Conversely, a near-term floor matches the bottom of the gap (115.40) and a breakout attempt is in play barring a violation.
Still well positioned
The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.
|Motorola Solutions, Inc.||MSI||Feb. 15|
|First Solar, Inc.||FSLR||Feb. 15|
|Varicel Corp.||VCEL||Feb. 15|
|SPDR S&P Retail ETF||XRT||Feb. 15|
|iShares Nasdaq Biotechnology ETF||IBB||Feb. 14|
|Lowe’s Companies, Inc.||LOW||Feb. 14|
|Home Depot, Inc.||HD||Feb. 14|
|Marriott International, Inc.||MAR||Feb. 14|
|General Electric Co.||GE||Feb. 14|
|Emerson Electric Co.||EMR||Feb. 13|
|Viper Energy Partners LP||VNOM||Feb. 13|
|Arrowhead Pharmaceuticals, Inc.||ARWR||Feb. 13|
|Splunk, Inc.||SPLK||Feb. 12|
|3M Co.||MMM||Feb. 12|
|Infosys Ltd.||INFY||Feb. 12|
|Zendesk, Inc.||ZEN||Feb. 11|
|Fortive Corp.||FTV||Feb. 11|
|Mastercard, Inc.||MA||Feb. 11|
|Procter & Gamble Co.||PG||Feb. 8|
|Boston Scientific Corp.||BSX||Feb. 8|
|Deckers Outdoor Corp.||DECK||Feb. 8|
|Alphabet, Inc.||GOOGL||Feb. 6|
|Norfolk Southern Corp.||NSC||Feb. 6|
|Packaging Corp. of America||PKG||Feb. 6|
|Akamai Technologies, Inc.||AKAM||Feb. 5|
|Global Payments, Inc.||GPN||Feb. 5|
|Alibaba Group Holding Ltd.||BABA||Feb. 5|
|Baidu, Inc.||BIDU||Feb. 4|
|Ebay, Inc.||EBAY||Feb. 4|
|Visa, Inc.||V||Feb. 4|
|Adobe, Inc.||ADBE||Feb. 1|
|Intercept Pharmaceuticals, Inc.||ICPT||Feb. 1|
|Owens Corning||OC||Feb. 1|
|ON Semiconductor Corp||ON||Jan. 31|
|MKS Instruments, Inc.||MKSI||Jan. 31|
|iRobot Corp.||IRBT||Jan. 31|
|Salesforce.com, Inc.||CRM||Jan. 30|
|KLA-Tencor Corp.||KLAC||Jan. 30|
|Western Digital Corp.||WDC||Jan. 30|
|Whirlpool Corp.||WHR||Jan. 30|
|SPDR S&P Homebuilders ETF||XHB||Jan. 30|
|Texas Instruments, Inc.||TXN||Jan. 29|
|Keysight Technologies, Inc.||KEYS||Jan. 29|
|Check Point Software Technologies||CHKP||Jan. 29|
|Exact Sciences Corp.||EXAS||Jan. 28|
|Schlumberger Limited||SLB||Jan. 28|
|Aptiv plc||APTV||Jan. 28|
|Teradyne, Inc.||TER||Jan. 28|
|VanEck Vectors Semiconductor ETF||SMH||Jan. 25|
|Applied Materials, Inc.||AMAT||Jan. 25|
|Micron Technology, Inc.||MU||Jan. 25|
|Roku, Inc.||ROKU||Jan. 25|
|iShares MSCI Emerging Markets ETF||EEM||Jan. 24|
|SBA Communications Corp.||SBAC||Jan. 24|
|Eastman Chemical Co.||EMN||Jan. 24|
|LGI Homes, Inc.||LGIH||Jan. 24|
|Paycom Software, Inc.||PAYC||Jan. 23|
|Delphi Technologies||DLPH||Jan. 23|
|Bed Bath & Beyond, Inc.||BBBY||Jan. 23|
|Eagle Materials, Inc.||EXP||Jan. 23|
|Advanced Micro Devices, Inc.||AMD||Jan. 22|
|Lennar Corp.||LEN||Jan. 22|
|Materials Select Sector SPDR||XLB||Jan. 18|
|Nike, Inc.||NKE||Jan. 18|
|VeriSign, Inc.||VRSN||Jan. 18|
|Dollar Tree, Inc.||DLTR||Jan. 18|
|Apple, Inc.||AAPL||Jan. 18|
|Nevro Corp.||NVRO||Jan. 17|
|Westlake Chemical Corp.||WLK||Jan. 17|
|Coupa Software, Inc.||COUP||Jan. 16|
|Veeva Systems, Inc.||VEEV||Jan. 16|
|Teledoc Health, Inc.||TDOC||Jan. 16|
|Incyte Corp||INCY||Jan. 16|
|Deere & Co.||DE||Jan. 11|
|CyberArk Software||CYBR||Jan. 11|
|Square, Inc.||SQ||Jan. 10|
|Facebook, Inc.||FB||Jan. 9|
|Okta, Inc.||OKTA||Jan. 9|
|Tandem Diabetes Care, Inc.||TNDM||Jan. 9|
|RingCentral, Inc||RNG||Jan. 8|
|Alteryx, Inc.||AYX||Jan. 8|
|Pioneer Natural Resources Co.||PXD||Jan. 8|
|Netflix, Inc.||NFLX||Jan. 7|
|iShares Brazil ETF||EWZ||Jan. 7|
|Ciena Corp.||CIEN||Jan. 7|
|Crox, Inc.||CROX||Jan. 7|
|Five9, Inc.||FIVN||Dec. 13|
|Ambarella, Inc.||AMBA||Dec. 11|
|Tech Data Corp.||TECD||Dec. 11|
|SPDR Gold Shares ETF||GLD||Dec. 10|
|VanEck Vectors Gold Miners ETF||GDX||Dec. 10|
|Workday, Inc.||WDAY||Dec. 10|
|Atlassian Corp.||TEAM||Dec. 10|
|Ventas, Inc.||VTR||Nov. 26|
|Ubiquiti Networks, Inc.||UBNT||Nov. 13|
|TripAdvisor, Inc.||TRIP||Nov. 13|
|Welltower, Inc.||WELL||Nov. 12|
|Xilinx, Inc.||XLNX||Nov. 12|
|Acacia Communications, Inc.||ACIA||Nov. 7|
|Starbucks Corp.||SBUX||Nov. 5|
|American Tower Corp.||AMT||Nov. 5|
|Utilities Select Sector SPDR||XLU||Oct. 25|
|McDonald’s Corp.||MCD||Oct. 24|
|Spirit Airlines, Inc.||SAVE||Oct. 19|
|Yum! Brands, Inc.||YUM||Oct. 18|
|Eli Lilly & Co.||LLY||Oct. 17|
|Merck & Co., Inc.||MRK||June 21|
|Twilio, Inc.||TWLO||May 21|
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