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Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Technically speaking, the U.S. benchmarks’ bigger-picture backdrop remains uneven as a March divergence persists.

On a headline basis, the S&P 500 and Dow industrials have retained a bullish intermediate-term bias — even amid recent volatility — while the Nasdaq Composite is vying Tuesday to repair a more damaging March downdraft.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Before detailing the U.S. markets’ wider view, the S&P 500’s
SPX,
+2.13%

 hourly chart highlights the past two weeks.

As illustrated, the S&P has staged a bullish reversal from major support (3,723).

The March low (3,723.3) has matched the inflection point, detailed repeatedly. (See the Feb. 23 review, for instance.)

The successful retest preserves a bullish intermediate-term bias.

More immediately, the prevailing upturn initially stalled near the breakdown point (3,870). The S&P has followed through atop this area early Tuesday. Constructive price action.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Meanwhile, the Dow Jones Industrial Average
DJIA,
+0.98%

 remains the strongest major benchmark.

In fact, the index has briefly tagged all-time highs.

The prevailing upturn punctuates a massive three-session bullish reversal, spanning as much as 1,601 points, or 5.2%.

Tactically, the former range top (31,650) pivots to notable support.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

True to recent form, the Nasdaq Composite
COMP,
+4.01%

continues to lag behind.

As illustrated, the index has maintained its next significant support (12,607). (See for instance, the Jan. 7 review.)

Consider that Monday’s close (12,609) effectively matched support, an area also illustrated below.

Conversely, the Nasdaq has initially stalled near its breakdown point (12,973). An extended retest of this area remains underway Tuesday.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Widening the view to six months adds perspective.

On this wider view, the Nasdaq is vying to neutralize last week’s technical breakdown.

Recall the initial downdraft resolved a bearish head-and-shoulders top — defined by the January, February and March peaks — placing the index at two-month lows.

Tactically, Monday’s close (12,609) matched the Nasdaq’s next significant support (12,607).

Conversely, important resistance matches the breakdown point, a level matching the 2020 peak (12,973). A swift reversal atop this area would neutralize last week’s breakdown.

(On a granular note, resistance technically spans from 12,973 to 13,004, levels matching the 2020 peak and February low. Monday’s session high (13,001) matched the latter.)

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Looking elsewhere, the Dow Jones Industrial Average continues to outperform.

Technically, the index has registered a bullish reversal from the 50-day moving average, rising to briefly tag all-time highs.

Slightly more broadly, the Dow has not strayed too far from its mid-February range amid constructive price action.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Meanwhile, the S&P 500’s bullish reversal punctuates a fleeting downturn to one-month lows.

Recall that last week’s low (3,723.3) matched the December gap (3,723), a level matching major support.

The bigger picture

Collectively, the major U.S. benchmarks remain in divergence mode — each index is doing different things — amid uneven March price action.

Against this backdrop, the S&P 500 and Dow industrials have retained a bullish intermediate-term bias, while the Nasdaq Composite’s price action has at least briefly signaled an intermediate-term caution flag.

Recall that the Nasdaq’s retest of its breakdown point — an area matching the 2020 peak (12,973) — remains underway Tuesday. A sustained reversal higher would neutralize the March downturn.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Moving to the small-caps, the iShares Russell 2000 ETF
IWM,
+2.53%

 has weathered a less aggressive March downturn.

The prevailing upturn punctuates a jagged retest of the 50-day moving average.

Also recall that the small-cap benchmark registered an unusually strong early-February breakout, encompassing four straight closes atop the 20-day Bollinger bands. The two standard deviation breakout signaled an extended posture — due to consolidate — amid a firmly-bullish longer-term outlook.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Similarly, the SPDR S&P MidCap 400 ETF
MDY,
+1.23%

 has effectively maintained its prevailing range, rising from a successful test of the 50-day moving average. Constructive price action.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Looking elsewhere, the SPDR Trust S&P 500
SPY,
+2.12%

 has registered a bullish reversal from next support, rising amid a March volume spike.

Also recall that the preceding downdraft registered amid relatively tame market internals,not the hallmark of a material trend shift.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Placing a finer point on the S&P 500, the index has rallied to its former range.

The prevailing upturn punctuates a successful test of major support (3,723), detailed previously. The March low (3,723.3) has matched support. Constructive price action.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

More broadly, the S&P 500 has registered a bullish reversal from major support (3,723).

The prevailing upturn punctuates a recent whipsaw at the 50-day moving average.

As detailed previously, an eventual violation of major support (3,723) — and the late-January lows — would mark a material “lower low” likely signaling an intermediate-term trend shift.

Beyond technical levels, the U.S. sector backdrop remains bullish-leaning, as detailed last week. The S&P 500’s intermediate-term path of least resistance continues to point higher, based on today’s backdrop.

Also see: Charting a bullish March start: S&P 500, Nasdaq maintain major support.

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 reversal: Nasdaq ventures atop the breakdown point

Drilling down further, the U.S. Global Jets ETF
JETS,
0.00

 is acting well technically.

The group initially spiked two weeks ago, knifing to 52-week highs on increased volume.

The upturn marked an unusually strong two standard deviation breakout, encompassing three straight closes atop the 20-day Bollinger bands.

The consecutive closes atop the bands signaled a then near-term extended posture — due a sideways chopping-around phase, that has subsequently transpired — amid a bullish longer-term outlook. (Also see the November break atop the bands, subsequent sideways price action, and upside follow-through.)

Separately, consider that the March low has punctuated a fleeting retest of the breakout point (24.00). The sharp reversal from major support signals that bullish momentum is intact.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Initially profiled July 20, the Materials Select Sector SPDR
XLB,
+1.26%

 has returned 24.8% and remains well positioned. (Yield = 1.6%.)

Technically, the group has weathered the recent broad-market volatility spike, maintaining the 50-day moving average.

The prevailing upturn has been fueled by increased volume, placing record highs under siege.

Tactically, the 50-day moving average, currently 74.20, is followed by the former breakout point (72.40). A sustained posture atop this area signals a comfortably bullish bias.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Moving to specific names, Visa, Inc.
V,
+1.73%

 is a well positioned large-cap name.

Technically, the shares have rallied to the range top, rising to challenge all-time highs.

The prevailing upturn punctuates a relatively tight March range. A near-term target projects to the 231 area on follow-through.

Conversely, the prevailing range bottom is closely followed by the 50-day moving average, currently 209.20. A breakout attempt is in play barring a violation.

More broadly, the shares are well positioned on the three-year chart, rising from a continuation pattern, of sorts, hinged to the 2020 V-shaped reversal.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Under Armour, Inc.
UA,
-1.36%

 is a well positioned large-cap name.

The shares initially spiked four weeks ago, gapping to 52-week highs after the company’s fourth-quarter results.

The subsequent pullback has been flat, positioning the shares to build on the initial strong-volume spike.

Tactically, a notable floor holds in the 17.85-to-18.00 area, levels closely matching the March low and February gap. A sustained posture higher signals a comfortably bullish bias.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Big Lots, Inc.
BIG,
-0.86%

 is a mid-cap discount retailer showing signs of life.

As illustrated, the shares have registered a bullish reversal from the March low, rising to tag a fractional record close amid increased volume.

The prevailing upturn punctuates an otherwise orderly three-week range, hinged to the sharp January rally. An intermediate-term target projects to the 74 area on follow-through.

Charting a bullish reversal: Nasdaq ventures atop the breakdown point

Finally, Alaska Air Group, Inc.
ALK,
-1.01%

 is a well positioned large-cap carrier.

Late last month, the shares knifed to 52-week highs, rising from an orderly two-month range.

The subsequent flag pattern has formed amid decreased volume, positioning the shares to build on the nearly straightline February spike.

Tactically, the prevailing range bottom (63.60) is followed by the post-breakout low (59.70). The prevailing uptrend is firmly-intact 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.

Company

Symbol* (Click symbol for chart.)

Date Profiled

State Street Corp.

STT

Mar. 8

American Eagle Outfitters, Inc.

AEO

Mar. 8

Hess Corp.

HES

Mar. 3

Alcoa Corp.

AA

Mar. 3

Beazer Homes USA, Inc.

BZH

Mar. 3

EchoStar Corp.

SATS

Mar. 3

Mastercard, Inc.

MA

Mar. 2

Boeing Co.

BA

Mar. 2

Starbucks Corp.

SBUX

Mar. 1

Oceaneering International, Inc.

OII

Mar. 1

Eaton Corp.

ETN

Feb. 25

Oracle Corp.

ORCL

Feb. 24

United Airlines Holdings, Inc.

UAL

Feb. 24

Nucor Corp.

NUE

Feb. 23

Signet Jewelers Limited

SIG

Feb. 23

Old Dominion Freight Line

ODFL

Feb. 22

Seagate Technology

STX

Feb. 19

Canada Goose Holdings, Inc.

GOOS

Feb. 19

Chevron Corp.

CVX

Feb. 18

Lyft, Inc.

LYFT

Feb. 16

Intel Corp.

INTC

Feb. 12

Helmerich & Payne, Inc.

HP

Feb. 11

U.S. Global Jets ETF

JETS

Feb. 9

Motorola Solutions, Inc.

MSI

Feb. 9

KeyCorp

KEY

Feb. 5

Diamondback Energy, Inc.

FANG

Feb. 4

Wix.com, Ltd.

WIX

Feb. 3

CarMax, Inc.

KMX

Feb. 3

Toll Brothers, Inc.

TOL

Feb. 2

Eagle Materials, Inc.

EXP

Feb. 2

Avis Budget Group, Inc.

CAR

Feb. 1

Capital One Financial Corp.

COF

Jan. 29

Aptiv, plc

APTV

Jan. 29

Cummins, Inc.

CMI

Jan. 25

Magna International, Inc.

MGA

Jan. 22

M.D.C. Holdings, Inc.

MDC

Jan. 22

Zebra Technologies Corp.

ZBRA

Jan. 14

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

Skyworks Solutions, Inc.

SWKS

Jan. 7

Financial Select Sector SPDR

XLF

Jan. 7

Synaptics, Inc.

SYNA

Jan. 4

JPMorgan Chase & Co.

JPM

Dec. 22

Calix, Inc.

CALX

Dec. 17

Tenet Healthcare Corp.

THC

Dec. 16

Williams-Sonoma, Inc.

WSM

Dec. 15

SDPR S&P Regional Banking ETF

KRE

Dec. 14

Etsy, Inc.

ETSY

Dec. 14

Emerson Electric Co.

EMR

Dec. 8

Fortinet, Inc.

FTNT

Dec. 7

Kulicke and Soffa Industries, Inc.

KLIC

Dec. 7

Dillard’s, Inc.

DDS

Dec. 4

Valero Energy Corp.

VLO

Dec. 3

Sonos, Inc.

SONO

Dec. 1

American Airlines Group, Inc.

AAL

Nov. 30

Zillow Group, Inc.

ZG

Nov. 23

Bank of America Corp.

BAC

Nov. 20

SPDR S&P Oil & Gas Exploration and Production ETF

XOP

Nov. 20

MetLife, Inc.

MET

Nov. 19

Kohl’s Corp.

KSS

Nov. 18

Applied Materials, Inc.

AMAT

Nov. 17

Regions Financial Corp.

RF

Nov. 13

Norfolk Southern Corp.

NSC

Nov. 9

Communications Services Select Sector SPDR

XLC

Nov. 5

Alphabet, Inc.

GOOGL

Nov. 5

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

SPDR S&P Homebuilders ETF

XHB

Oct. 9

Shake Shack, Inc.

SHAK

Oct. 9

Martin Marietta Materials, Inc.

MLM

Sept. 30

Abercrombie & Fitch Co.

ANF

Sept. 29

Scientific Games Corp.

SGMS

Sept. 23

Crocs, Inc.

CROX

Sept. 14

Five Below, Inc.

FIVE

Sept. 10

Eastman Chemical Co.

EMN

Sept. 10

Deere & Co.

DE

Aug. 24

Johnson Controls International

JCI

Aug. 21

General Motors Co.

GM

Aug. 20

Builders FirstSource, Inc.

BLDR

Aug. 18

Freeport McMoRan, Inc.

FCX

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

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Roku, Inc.

ROKU

July 16

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

Tesla, Inc.

TSLA

Apr. 23

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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