Banking

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Technically speaking, the major U.S. benchmarks continue to trend higher amid a constructive February start.

Against this backdrop, each big three benchmark has concurrently registered record highs, knifing from major support to previously uncharted territory.

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 extended its latest break to record territory, rising to register its first close atop the 3,900 mark.

Tactically, the S&P’s first notable support matches the breakout point (3,870). Delving deeper, the 3,830 area remains an inflection point.

Meanwhile, the Dow Jones Industrial Average
US:DJIA
 has broken less decisively to record highs.

Nonetheless, the index has edged above its former range top, reaching previously uncharted territory.

Recent follow-through punctuates a V-shaped reversal underpinned by major support (29,964) also detailed on the daily chart.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

True to recent form, the Nasdaq Composite
US:COMP
remains the strongest major benchmark.

The prevailing upturn places the 14,000 mark within view. The index has ventured slightly atop the round number early Tuesday.

Conversely, the Nasdaq’s breakout point (13,730) marks its first notable floor.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended its break to previously uncharted territory.

In the process, the index has registered a sharp rally from 13,000 to 14,000 — about a 7.7% span — across just eight sessions.

Tactically, a near-term target continues to project to the 14,200 area.

More broadly, the prevailing upturn originates from support matching the 2020 peak (12,973), detailed repeatedly. The late-January low (12,985) registered about 12 points above support.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Looking elsewhere, the Dow Jones Industrial Average has belatedly broken out, notching a single close above the range top.

Still, the directionally sharp February rally is technically constructive.

Tactically, the prevailing upturn originates from last-ditch support (29,964) — detailed previously — placing the index firmly atop its former breakdown point (30,283). (Also see the hourly chart.)

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Meanwhile, the S&P 500 has extended a respectable February breakout.

This week’s follow-through punctuates a sharp reversal from major support. Recall the January close registered within two points of the 50-day moving average, an area matching the S&P’s former breakout point.

The bigger picture

Collectively, the major U.S. benchmarks are off to a bullish February start.

On a headline basis, each big three benchmark has reached record territory to punctuate a V-shaped reversal from major support.

Specifically, the Nasdaq Composite has rallied from the 2020 peak (12,973), the Dow Jones Industrial Average has maintained last-ditch support (29,964) and the S&P 500 has spiked from support closely matching its 50-day moving average. (See the daily charts.)

Each benchmark’s intermediate-term bias remains bullish.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Moving to the small-caps, the iShares Russell 2000 ETF
US:IWM
 has knifed more aggressively to record highs.

The prevailing upturn marks a two standard deviation breakout, encompassing three straight closes atop the 20-day Bollinger bands.

Though still near-term extended — and due a cooling-off period — the statistically unusual breakout improves the chances of longer-term follow-through. (See the equally powerful early-November and early-January breakouts, followed by flattish pullbacks, and upside follow-through)

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Meanwhile, the SPDR S&P MidCap 400 ETF
US:MDY
 has registered a respectable, though less decisive, February breakout.

The MDY is vying Tuesday to register its second straight close atop the 20-day volatility bands amid a two standard deviation breakout.

The prevailing upturn originates from familiar support (425.30), an area closely matching the 2020 peak.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Looking elsewhere, the SPDR Trust S&P 500
US:SPY
 has extended a respectable — though not off-the-charts — technical breakout.

Though the upturn has been fueled by lackluster volume, the rally’s internal strength remains bull-case supportive.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Placing a finer point on the S&P 500, the index has extended its breakout, notching three straight record closes.

Recall that the breakout point (3,870) marks the first notable floor from current levels.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

More broadly, the prevailing upturn punctuates a V-shaped reversal from major support.

The specific area matches the late-December breakout point (3,823) and the 50-day moving average. The January close registered within two points of the 50-day moving average, and has been punctuated by a persistent February rally.

On further strength, a near-term target continues to project from the S&P’s late-January range to the 4,010 area, about 2.4% above current levels.

Conversely, the S&P’s breakout point (3,870) is followed by a deeper floor in the 3,830 area.

Beyond technical levels, the U.S. sub-sector backdrop remains constructive, and the prevailing uptrend is firmly-grounded as it applies to the internals. The S&P 500’s intermediate-term bias remains comfortably bullish, based on today’s backdrop.

Also see: Charting a bullish February start: S&P 500 spikes from 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 grinding-higher breakout, S&P 500 tags latest record peak

Drilling down further, the Energy Select Sector SPDR
US:XLE
 is acting well technically. (Yield = 4.8%.)

As illustrated, the group has rallied to challenge resistance at eight-month highs. The prevailing upturn originates from support roughly matching the 50-day moving average and the mid-2020 range top.

Tactically, the response to the prevailing range top should be a useful bull-bear gauge. A near-term target projects to the 50 area on follow-through.

Conversely, a near-term floor (41.75) closely matches the December peak. The group’s breakout attempt is intact barring a violation.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Meanwhile, the U.S. Global Jets ETF
US:JETS
 is also showing signs of life.

The group initially spiked three months ago, gapping sharply higher amid vaccine-fueled optimism. The subsequent two-month range is a bullish continuation pattern, hinged to the initial November spike.

Against this backdrop, the February rally places 11-month highs under siege. Tactically, the former range top, circa 23.00, pivots to support. A posture higher signals a bullish near-term bias.

More broadly, the tandem airlines and energy sector resurgence is consistent with a reflation trade, an expected return to pre-virus economic conditions. (Fuel is a significant expense for the airlines, and rising energy prices conventionally present a sector headwind.)

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Moving to specific names, Lowe’s Companies, Inc.
US:LOW
 is a well positioned large-cap home improvement retailer.

As illustrated, the shares have rallied to the range top, rising to challenge all-time highs. Monday’s close marked a nominal record close.

Tactically, the 50-day moving average has marked an inflection point, and is rising toward the former range top, circa 171.50. A posture atop this area supports a bullish bias.

More broadly, the shares are well positioned on the three-year chart, rising from a continuation pattern hinged to the massive 2020 rally.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Initially profiled Oct. 7, Cloudflare, Inc.
US:NET
 has returned 110% and remains well positioned.

Technically, the shares have reached record territory, clearing resistance matching the December and January peaks amid increased volume. An intermediate-term target projects to the 99 area.

Conversely, the breakout point, circa 87.00, pivots to support. The prevailing uptrend is firmly-intact barring a violation.

Note that the company’s quarterly results are due out Feb. 11.

Charting a grinding-higher breakout, S&P 500 tags latest record peak

Finally, Motorola Solutions, Inc.
US:MSI
 is a well positioned large-cap name. (Yield = 1.6%.)

Earlier this month, the shares knifed to 11-month highs, rising after the company’s fourth-quarter results. The breakout punctuates a prolonged nearly four-month base. (The longer the base, the higher the space.)

Underlying the upturn, its relative strength index (not illustrated) has tagged its best levels since October, improving the chances of longer-term follow-through.

Though still near-term extended, and due to consolidate, the shares are attractive on a pullback. The breakout point (175.20) pivots to support.

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

iShares U.S. Home Construction ETF

ITB

Feb. 8

Lennar Corp.

LEN

Feb. 8

Nike, Inc.

NKE

Feb. 8

Beyond Meat, Inc.

BYND

Feb. 8

Cisco Systems, Inc.

CSCO

Feb. 5

KeyCorp

KEY

Feb. 5

Datadog, Inc.

DDOG

Feb. 5

Appian Corp.

APPN

Feb. 4

Diamondback Energy, Inc.

FANG

Feb. 4

Gogo, Inc.

GOGO

Feb. 4

Wix.com, Ltd.

WIX

Feb. 3

CarMax, Inc.

KMX

Feb. 3

Sierra Wireless

SWIR

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

NetApp, Inc.

NTAP

Jan. 29

Aptiv, plc

APTV

Jan. 29

Rio Tinto Group

RIO

Jan. 26

Sorrento Therapeutics, Inc.

SRNE

Jan. 26

Netflix, Inc.

NFLX

Jan. 25

Cummins, Inc.

CMI

Jan. 25

Invesco Solar ETF

TAN

Jan. 22

Magna International, Inc.

MGA

Jan. 22

M.D.C. Holdings, Inc.

MDC

Jan. 22

Zebra Technologies Corp.

ZBRA

Jan. 14

Chegg, Inc.

CHGG

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

Skyworks Solutions, Inc.

SWKS

Jan. 7

Financial Select Sector SPDR

XLF

Jan. 7

Synaptics, Inc.

SYNA

Jan. 4

Sunrun, Inc.

RUN

Dec. 23

ShockWave Medical, Inc.

SWAV

Dec. 23

JPMorgan Chase & Co.

JPM

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

Calix, Inc.

CALX

Dec. 17

Elastic N.V.

ESTC

Dec. 17

Tenet Healthcare Corp.

THC

Dec. 16

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

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

Dillard’s, Inc.

DDS

Dec. 4

Spotify Technology S.A.

SPOT

Dec. 3

Valero Energy Corp.

VLO

Dec. 3

Analog Devices, Inc.

ADI

Dec. 2

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

RingCentral, Inc.

RNG

Nov. 13

Regions Financial Corp.

RF

Nov. 13

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

Keysight Technologies, Inc.

KEYS

Nov. 4

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

First Solar, Inc.

FSLR

Oct. 13

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

SailPoint 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

Deere & Co.

DE

Aug. 24

Johnson Controls International

JCI

Aug. 21

Canadian Solar, Inc.

CSIQ

Aug. 20

General Motors Co.

GM

Aug. 20

Builders FirstSource, Inc.

BLDR

Aug. 18

Enphase Energy, Inc.

ENPH

Aug. 13

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

Advanced Micro Devices, Inc.

AMD

July 23

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Roku, Inc.

ROKU

July 16

Consumer Discretionary Select Sector SPDR

XLY

July 13

SunPower Corp.

SPWR

July 13

Danaher Corp.

DHR

June 24

Fiverr International, Ltd.

FVRR

June 19

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

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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