Banking

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Technically speaking, the major U.S. benchmarks have asserted a holding pattern, digesting a sharp early-month rally to record territory.

Recent range-bound price action signals still muted selling pressure — in the wake of statistically unusual technical breakouts — preserving a comfortably bullish intermediate-term bias.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Before detailing the U.S. markets’ wider view, the S&P 500’s
US:SPX
 hourly chart highlights the past two weeks.

As illustrated, the S&P has staged an orderly pullback from the range top.

The downturn has been underpinned by near-term support (3,764) as well as the 20-day moving average, currently 3,750. Last week’s low (3,749) closely matched the 20-day.

On further weakness, firmer support rests in the 3,723-to-3,726 area.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Meanwhile, the Dow Jones Industrial Average
US:DJIA
 has pulled in from a nominal record high, established late last week.

The downturn has been underpinned by a shaky, but successful, test of its range bottom (30,793).

Slightly more broadly, the Dow is traversing a relatively narrow eight-session range. The prevailing range is hinged to an early-month rally from major support (29,964), an area also detailed on the daily chart.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Against this backdrop, the Nasdaq Composite
US:COMP
has maintained its first notable support.

The specific area matches the breakout point (12,973) — also detailed on the daily chart below — preserving a seven-session range near record highs. Constructive price action.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has asserted a January flag pattern underpinned by the breakout point (12,973). The index registered two successful retests of support last week.

Also recall that the 20-day moving average, currently 12,918, is rising toward support. The Nasdaq has not closed under the 20-day since Nov. 3.

Delving deeper, the former breakout point (12,607) underpinned the early-January whipsaw — (the long red bar, also detailed on the hourly chart) — and is followed by the 50-day moving average, currently 12,455.

The Nasdaq’s backdrop supports a bullish intermediate-term bias barring a violation of these areas.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Looking elsewhere, the Dow Jones Industrial Average is digesting a technically more aggressive January spike.

As detailed repeatedly, the initial rally marked a two standard deviation breakout, encompassing three straight closes atop the 20-day Bollinger bands.

Tactically, the December gap (30,283) is followed by the 50-day moving average, currently 30,058, and the mid-November range top (29,964). A sustained posture atop these areas signals a bullish intermediate-term bias.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Similarly, the S&P 500 is digesting a decisive early-January breakout.

Recall that the 20-day moving average, currently 3,750, has effectively defined the recent trend. Last week’s low (3,749.6) registered nearby.

The bigger picture

As detailed above, the major U.S. benchmarks are acting well technically.

On a headline basis, each big three benchmark has weathered last week’s modest pullback, preserving a range-bound posture near record highs. (See the hourly charts.)

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Moving to the small-caps, the iShares Russell 2000 ETF
US:IWM
 has registered a modest pullback from record highs, though amid increased volume.

Recent price action punctuates an unusually strong 6.3% breakout to start the new year.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Similarly, the SPDR S&P MidCap 400 ETF
US:MDY
 is off to a strong 2021 start.

Recall that the small- and mid-cap breakouts initially encompassed four closes atop the 20-day volatility bands across a five-session span signalling statistically unusual bullish momentum.

Though still near-term extended, the decisive breaks to record territory improve the chances of longer-term follow-through.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Looking elsewhere, the SPDR Trust S&P 500
US:SPY
 is consolidating a less-decisive breakout.

Tactically, the 20-day moving average, currently 373.65, is followed by an inflection point matching the December gap, circa 371.10.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Placing a finer point on the S&P 500, the index has weathered a modest downturn from the range top.

Recall this was the lone big three U.S. benchmark not to register a record high last week.

Tactically, near-term support, circa 3,764, has underpinned the pullback. Delving deeper, the 3,723-to-3,726 area marks the S&P’s first significant floor.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

More broadly, the prevailing “expected” consolidation phase — or sideways price action — punctuates an unusually strong two standard deviation breakout.

The index continues to digest recent gains amid a comfortably bullish intermediate-term backdrop.

Tactically, the 20-day moving average, currently 3,750, is followed by a notable floor in the 3,723-to-3,726 area. The 20-day has underpinned the S&P’s recent grinding-higher trend.

Delving deeper, the 50-day moving average, currently 3,674, is followed by the former breakout point (3,646), a level precisely matching the early-December gap and the mid-November range top.

Broadly speaking, the S&P 500’s intermediate-term bias remains bullish barring a violation of these areas.

Also see: Charting a decisive 2021 breakout: U.S. benchmarks clear 20-day volatility bands.

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.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Drilling down further, the iShares Europe ETF
US:IEV
 is acting well technically. (Yield = 1.7%.)

The shares started the year with a breakout, knifing to nearly three-year highs, the best levels since February 2018.

By comparison, the ensuing pullback has been flat, positioning the shares to extend the uptrend.

Tactically, the breakout point (47.90) is followed by the 50-day moving average, currently 47.25, and the former range bottom (46.30). A sustained posture higher signals a bullish bias.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Initially profiled July 28, the SPDR S&P Metals & Mining ETF
US:XME
 has returned 49.0% and remains well positioned.

Earlier this month, the group knifed to 18-month highs, rising from a tight December range.

The initial spike marked a bullish two standard deviation breakout, encompassing three straight closes atop the 20-day Bollinger bands. As always, consecutive closes atop the bands signal a near-term extended posture — due a cooling-off period — amid a firmly-bullish longer-term backdrop.

More immediately, the prevailing pullback has filled the early-January gap, placing the group 7.7% under the January peak. Deeper support matches the breakout point (33.80). The prevailing uptrend is firmly-intact barring a violation.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Moving to specific names, Sunnova Energy International, Inc.
US:NOVA
 is a mid-cap manufacturer of residential solar and energy storage solutions.

The shares initially spiked two weeks ago, rising amid a volume spike after the Georgia Senate runoff elections.

The subsequent pullback has been fueled by decreased volume, placing the shares 21.5% under the January peak. Tactically, the breakout point (46.00) marks well-defined support. A sustained posture higher signals a comfortably bullish bias.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Initially profiled Nov. 2, Exact Sciences Corp.
US:EXAS
 has returned 17.9% and remains well positioned.

Earlier this month, the shares knifed to record highs, rising after the company reported strong preliminary fourth-quarter results.

The subsequent flag pattern has been underpinned by the breakout point (141.90), positioning the shares to build on the initial straightline spike. An intermediate-term target projects to the 165 area on follow-through.

Charting a bullish holding pattern, S&P 500 maintains 20-day average

Finally, Reliance Steel & Aluminum Co.
US:RS
 is a well positioned large-cap name. (Yield = 2.0%.)

The shares started the year with a breakout, gapping to all-time highs amid increased volume.

The subsequent pullback has been comparably flat, placing the shares 6.0% under the January peak. Tactically, gap support (126.40) is followed by the firmer breakout point (122.85).

More broadly, the shares are well positioned on the three-year chart, reaching previously uncharted territory from a bullish V-shaped 2020 reversal.

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.

Company

Symbol* (Click symbol for chart.)

Date Profiled

Alaska Air Group, Inc.

ALK

Jan. 15

Chevron Corp.

CVX

Jan. 15

Zebra Technologies Corp.

ZBRA

Jan. 14

Juniper Networks, Inc.

JNPR

Jan. 14

Fate Therapeutics, Inc.

FATE

Jan. 14

Chegg, Inc.

CHGG

Jan. 11

Ambarella, Inc.

AMBA

Jan. 11

Macy’s, Inc.

M

Jan. 11

Nexstar Media Group, Inc.

NXST

Jan. 11

iShares Transportation Average ETF

IYT

Jan. 11

Energy Select Sector SPDR

XLE

Jan. 8

Teledoc Health, Inc.

TDOC

Jan. 8

Dollar Tree, Inc.

DLTR

Jan. 8

Skyworks Solutions, Inc.

SWKS

Jan. 7

Financial Select Sector SPDR

XLF

Jan. 7

Devon Energy Corp.

DVN

Jan. 6

Alcoa Corp.

AA

Jan. 6

FireEye, Inc.

FEYE

Jan. 5

Check Point Software Technologies

CHKP

Jan. 4

Synaptics, Inc.

SYNA

Jan. 4

Ceridian HCM Holding, Inc.

CDAY

Jan. 4

Lumentum Holdings, Inc.

LITE

Dec. 23

Sunrun, Inc.

RUN

Dec. 23

ShockWave Medical, Inc.

SWAV

Dec. 23

JPMorgan Chase & Co.

JPM

Dec. 22

Coupa Software, Inc.

COUP

Dec. 22

PagSeguro Digital Ltd.

PAGS

Dec. 22

Ballard Power Systems, Inc.

BLDP

Dec. 21

LivePerson, Inc.

LPSN

Dec. 21

United Therapeutics Corp.

UTHR

Dec. 21

Shopify, Inc.

SHOP

Dec. 18

CyberArk Software Ltd.

CYBR

Dec. 18

Apellis Pharmaceuticals, Inc.

APLS

Dec. 18

Calix, Inc.

CALX

Dec. 17

Elastic N.V.

ESTC

Dec. 17

Cerner Corp.

CERN

Dec. 17

Universal Health Services, Inc.

UHS

Dec. 16

Tenet Healthcare Corp.

THC

Dec. 16

Sunnova Energy International, Inc.

NOVA

Dec. 16

Toyota Motor Co.

TM

Dec. 15

Williams-Sonoma, Inc.

WSM

Dec. 15

iShares Nasdaq Biotechnology ETF

IBB

Dec. 15

SDPR S&P Regional Banking ETF

KRE

Dec. 14

Etsy, Inc.

ETSY

Dec. 14

Surface Oncology, Inc.

SURF

Dec. 14

Autodesk, Inc.

ADSK

Dec. 9

Monster Beverage Corp.

MNST

Dec. 9

Cimarex Energy Co.

XEC

Dec. 9

Plug Power, Inc.

PLUG

Dec. 9

F5 Networks, Inc.

FFIV

Dec. 8

Emerson Electric Co.

EMR

Dec. 8

Zscaler, Inc.

ZS

Dec. 7

Fortinet, Inc.

FTNT

Dec. 7

Kulicke and Soffa Industries, Inc.

KLIC

Dec. 7

Honeywell International, Inc.

HON

Dec. 7

Dillard’s, Inc.

DDS

Dec. 4

Caleres, Inc.

CAL

Dec. 4

Spotify Technology S.A.

SPOT

Dec. 3

Align Technology, Inc.

ALGN

Dec. 3

Valero Energy Corp.

VLO

Dec. 3

Analog Devices, Inc.

ADI

Dec. 2

Cirrus Logic, Inc.

CRUS

Dec. 1

Sonos, Inc.

SONO

Dec. 1

Dollar Tree, Inc.

DLTR

Dec. 1

Nuance Communications, Inc.

NUAN

Nov. 30

Northern Trust Corp.

NTRS

Nov. 30

American Airlines Group, Inc.

AAL

Nov. 30

Microchip Technology, Inc.

MCHP

Nov. 24

Zillow Group, Inc.

ZG

Nov. 23

Yeti Holdings, Inc.

YETI

Nov. 23

Palo Alto Networks, Inc.

PANW

Nov. 20

Bank of America Corp.

BAC

Nov. 20

Eaton Corp.

ETN

Nov. 20

SPDR S&P Oil & Gas Exploration and Production ETF

XOP

Nov. 20

MetLife, Inc.

MET

Nov. 19

Hilton Worldwide Holdings, Inc.

HLT

Nov. 19

American Express Co.

AXP

Nov. 18

Kohl’s Corp.

KSS

Nov. 18

FleetCor Technologies

FLT

Nov. 18

Applied Materials, Inc.

AMAT

Nov. 17

Delta Air Lines, Inc.

DAL

Nov. 17

Consumer Staples Select Sector SPDR

XLP

Nov. 17

Ross Stores, Inc.

ROST

Nov. 16

RingCentral, Inc.

RNG

Nov. 13

Regions Financial Corp.

RF

Nov. 13

iShares Europe ETF

IEV

Nov. 13

Flex, Inc.

FLEX

Nov. 9

Snap, Inc.

SNAP

Nov. 9

Norfolk Southern Corp.

NSC

Nov. 9

Communications Services Select Sector SPDR

XLC

Nov. 5

Health Care Select Sector SPDR

XLV

Nov. 5

Alphabet, Inc.

GOOGL

Nov. 5

Uber Technologies, Inc.

UBER

Nov. 5

Keysight Technologies, Inc.

KEYS

Nov. 4

Harley-Davidson, Inc.

HOG

Nov. 4

Garmin, Ltd.

GRMN

Nov. 4

Pinterest, Inc.

PINS

Nov. 3

Sony Corp.

SNE

Nov. 3

8×8, Inc.

EGHT

Nov. 3

Exact Sciences Corp.

EXAS

Nov. 2

Universal Display Corp.

OLED

Nov. 2

Dentsply Sirona, Inc.

XRAY

Oct. 27

Maxim Integrated Products, Inc.

MXIM

Oct. 21

The Travelers Companies, Inc.

TRV

Oct. 21

Micron Technology, Inc.

MU

Oct. 20

Vulcan Materials Co.

VMC

Oct. 19

ON Semiconductor Corp.

ON

Oct. 16

Ford Motor Co.

F

Oct. 15

Texas Instruments, Inc.

TXN

Oct. 15

First Solar, Inc.

FSLR

Oct. 13

Nevro Corp.

NVRO

Oct. 12

Teradyne, Inc.

TER

Oct. 12

SPDR S&P Homebuilders ETF

XHB

Oct. 9

Shake Shack, Inc.

SHAK

Oct. 9

SPDR S&P Biotech ETF

XBI

Oct. 8

Twilio, Inc.

TWLO

Oct. 8

Cloudflare, Inc.

NET

Oct. 7

Ceridian HCM Holding, Inc.

CDAY

Oct. 7

RSailPoint Technology Holdings, Inc.

SAIL

Oct. 1

Martin Marietta Materials, Inc.

MLM

Sept. 30

Abercrombie & Fitch Co.

ANF

Sept. 29

Zendesk, Inc.

ZEN

Sept. 23

Scientific Games Corp.

SGMS

Sept. 23

Crocs, Inc.

CROX

Sept. 14

Five Below, Inc.

FIVE

Sept. 10

Eastman Chemical Co.

EMN

Sept. 10

International Paper Co.

IP

Sept. 3

Anaplan, Inc.

PLAN

Sept. 2

Celanese Corp.

CE

Aug. 26

Westlake Chemical Corp.

WLK

Aug. 25

Deere & Co.

DE

Aug. 24

Expedia Group, Inc.

EXPE

Aug. 24

Johnson Controls International

JCI

Aug. 21

Canadian Solar, Inc.

CSIQ

Aug. 20

General Motors Co.

GM

Aug. 20

Starbucks Corp.

SBUX

Aug. 18

Builders FirstSource, Inc.

BLDR

Aug. 18

Steel Dynamics, Inc.

STLD

Aug. 17

Brinker International, Inc.

EAT

Aug. 13

Enphase Energy, Inc.

ENPH

Aug. 13

Nucor Corp.

NUE

Aug. 11

Freeport McMoRan, Inc.

FCX

Aug. 10

Natera, Inc.

NTRA

Aug. 10

Industrial Select Sector SPDR

XLI

Aug. 6

Penn National Gaming, Inc.

PENN

July 30

SPDR S&P Metals & Mining ETF

XME

July 28

iShares MSCI South Korea ETF

EWY

July 28

Advanced Micro Devices, Inc.

AMD

July 23

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Roku, Inc.

ROKU

July 16

Cognizant Technology Solutions, Inc.

CTSH

July 16

Consumer Discretionary Select Sector SPDR

XLY

July 13

SunPower Corp.

SPWR

July 13

Walmart, Inc.

WMT

July 8

Danaher Corp.

DHR

June 24

Fiverr International, Ltd.

FVRR

June 19

HubSpot, Inc.

HUBS

June 8

Square, Inc.

SQ

June 8

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

Synopsis, Inc.

SNPS

May 27

Agilent Technologies, Inc.

A

May 15

Qualcomm, Inc.

QCOM

May 12

Five9, Inc.

FIVN

Apr. 24

Chewy, Inc.

CHWY

Apr. 24

Tesla, Inc.

TSLA

Apr. 23

VanEck Vectors Semiconductor ETF

SMH

Apr. 17

Okta, Inc.

OKTA

Apr. 16

Target Corp.

TGT

Apr. 16

Invesco QQQ Trust

QQQ

Apr. 14

Apple, Inc.

AAPL

Mar. 27

iShares MSCI Emerging Markets ETF

EEM

Mar. 19

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.

 

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