Banking

Charting the approach of Dow 30,000 as bullish sector rotation persists

Technically speaking, the major U.S. benchmarks continue to rise amid firmly-bullish November price action.

Against this backdrop, the S&P 500 and Dow industrials have concurrently registered record closes, to start this week, amid still healthy market rotation and expanding sector participation.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Before detailing the U.S. markets’ wider view, the S&P 500’s
SPX,
-0.21%
 hourly chart highlights the past two weeks.

As illustrated, the S&P has extended its November rally, tagging a record close.

Tactically, Tuesday’s early session low (3,588.7) has matched support at the September peak (3,588), a level formerly marking the S&P’s all-time high.

More broadly, the prevailing upturn punctuates last week’s flag-like pattern, hinged to the steep early-November rally.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Similarly, the Dow Jones Industrial Average
DJIA,
-0.44%
 has extended its November rally.

In its case, the blue-chip benchmark has registered a record close (29,950) as well as an absolute record peak (29,964).

The marquee 30,000 mark is firmly within view.

Charting the approach of Dow 30,000 as bullish sector rotation persists

True to recent form, the Nasdaq Composite
COMP,
+0.09%
remains in divergence mode.

This is the lone big three U.S. benchmark not to register a record close Monday.

Nonetheless, the index has maintained major support — the 11,450-to-11,460 area — and continues to generally hold its range top. Constructive price action.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has weathered last week’s downdraft from the range top.

Recall that the downturn has been underpinned by major support (11,460).

More immediately, the prevailing upturn places within view a retest of major resistance. Overhead inflection points match the October peak (11,965), the Nasdaq’s record close (12,056) and the November peak (12,108). (Also see the September peak (12,074), formerly the Nasdaq’s all-time high.)

Charting the approach of Dow 30,000 as bullish sector rotation persists

Looking elsewhere, the Dow Jones Industrial Average has rallied to record highs.

The prevailing upturn punctuates a mid-November flag-like pattern, the tight range effectively underpinned by gap support (29,127).

To reiterate, the 30,000 mark is firmly within striking distance.

More broadly, the prevailing upturn punctuates a successful test of the 200-day moving average at the October low.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Meanwhile, the S&P 500 has rallied to register a record close.

The prevailing follow-through punctuates a flag-like pattern hinged to the steep early-November rally. Recall the October peak (3,550) remains an inflection point.

The bigger picture

Collectively, the bigger-picture backdrop continues to strengthen amid unusually strong November price action.

On a headline basis, the S&P 500 and Dow industrials have concurrently registered record closes.

Meanwhile, the Nasdaq Composite has not broken out, pressured at least partly as a source of funds deployed elsewhere. Very generally, the stay-at-home trade favored the technology sector, and recent vaccine progress has contributed to rotation elsewhere.

Against this backdrop, each big three U.S. benchmark’s intermediate-term bias remains bullish.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Moving to the small-caps, the iShares Russell 2000 ETF has extended a November breakout.

In the process, the small-cap benchmark has notched consecutive record closes, eclipsing its former record close (173.02), established August 2018.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Similarly, the SPDR S&P MidCap 400 ETF has registered consecutive record closes.

More broadly, the small- and mid-cap benchmarks are rising from tandem flag-like patterns hinged to the steep early-November rallies. Bullish price action.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Looking elsewhere, the SPDR Trust S&P 500 has tagged a record close amid a less-decisive breakout.

The prevailing upturn punctuates a double bottom defined by the September and October lows.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Placing a finer point on the S&P 500, the index is building on last Monday’s vaccine-fueled breakout, six sessions ago.

The ensuing pullback filled the gap, and the S&P has subsequently rallied to notch consecutive record closes. Bullish price action.

Charting the approach of Dow 30,000 as bullish sector rotation persists

More broadly, the S&P 500 is rising from a flag-like pattern hinged to the steep early-November spike from major support (3,233).

The bull flag punctuates a double bottom — the W formation — defined by the September and October lows.

Against this backdrop, the S&P is traversing truly less-charted territory, capped only by its absolute record peak (3,646).

Tactically, the September peak (3,588) marks its first notable floor. Tuesday’s early session low (3,588.7) has matched the inflection point.

Beyond technical levels, the bigger-picture backdrop continues to strengthen amid healthy market rotation and expanding sector participation. The S&P 500’s path of least resistance points higher pending signs of a bearish pulse.

Also see: Charting market rotation: S&P 500, Dow industrials challenge record highs.

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 the approach of Dow 30,000 as bullish sector rotation persists

Drilling down further, the iShares MSCI Japan ETF
EWJ,
-0.30%
 has taken flight. (Yield = 2.0%.)

Specifically, the shares have knifed to 22-month highs, rising amid a massive two standard deviation breakout, encompassing four straight closes atop the 20-day Bollinger bands.

The subsequent flag pattern — the tight one-week range — positions the shares to build on the decisive breakout.

More broadly, the shares are pressing a truly longer-term range top, illustrated on the 24-year chart. Follow-through atop the 2018 peak (64.72) would place the shares at 20-year highs. The November peak (64.45) has registered nearby.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Moving to U.S. sectors, the SPDR S&P Retail ETF
XRT,
+0.21%
 is challenging record highs.

In fact, the group has edged atop resistance matching the October peak, rising to notch a record close. The prevailing upturn punctuates a tight range, laying the groundwork for potentially more decisive follow-through.

Tactically, the group’s former range bottom (53.25) remains an inflection point. A breakout attempt is in play barring a violation.

More broadly, the group remains well positioned on the three-year chart, rising from a continuation pattern hinged to the massive early-2020 V-shaped reversal.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Meanwhile, the Consumer Staples Select Sector SPDR
XLP,
-0.23%
 has reached record territory. (Yield = 2.5%.)

The prevailing upturn punctuates a double bottom defined by the September and October lows. An intermediate-term target projects to the 72.00 area on follow-through.

Conversely, the breakout point (66.80) pivots to support. A posture higher signals a firmly-bullish bias.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Moving to specific names, Applied Materials, Inc.
AMAT,
-0.15%
 is a well positioned large-cap chip equipment name.

As illustrated, the shares have tagged a record close, rising after the company’s quarterly results, released late last week. The prevailing upturn builds on the steep early-November spike to all-time highs.

Tactically, the breakout point (69.90) pivots to support and is closely followed by the post-breakout low (69.10).

More broadly, the shares are well positioned on the four-year chart, rising to record territory from a multi-year cup-and-handle pattern.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Initially profiled July 13, SunPower Corp.
SPWR,
+3.59%
 has returned 226% and remains well positioned.

Earlier this month, the shares knifed to five-year highs, clearing the October peak amid a volume spike. The ensuing pullback has been comparably flat, fueled by decreased volume, placing the shares 9.5% under the November peak.

Tactically, the breakout point (18.20) pivots to well-defined support. The prevailing uptrend is firmly-intact barring a violation.

Charting the approach of Dow 30,000 as bullish sector rotation persists

Finally, Delta Air Lines, Inc.
DAL,
-0.60%
 is a large-cap carrier coming to life.

Technically, the shares have recently knifed to six-month highs, gapping atop the 200-day moving average amid a vaccine-fueled rally.

Though still near-term extended, the strong-volume spike signals a trend shift. Tactically, the October peak (34.04) matches the post-breakout low (34.02) and marks well-defined support.

Also notice the recent golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the longer-term trend.

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

Appian Corp.

APPN

Nov. 16

Ross Stores, Inc.

ROST

Nov. 16

Boeing Co.

BA

Nov. 16

RingCentral, Inc.

RNG

Nov. 13

Urban Outfitters, Inc.

URBN

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

Materials Select Sector SPDR

XLB

Nov. 6

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

Jazz Pharmaceuticals, plc

JAZZ

Oct. 21

The Travelers Companies, Inc.

TRV

Oct. 21

Micron Technology, Inc.

MU

Oct. 20

Vulcan Materials Co.

VMC

Oct. 19

Utilities Select Sector SPDR

XLU

Oct. 19

ON Semiconductor Corp.

ON

Oct. 16

Ford Motor Co.

F

Oct. 15

Texas Instruments, Inc.

TXN

Oct. 15

Skyworks Solutions, Inc.

SWKS

Oct. 14

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

Alexion Pharmaceuticals, Inc.

ALXN

Oct. 8

Twilio, Inc.

TWLO

Oct. 8

Cloudflare, Inc.

NET

Oct. 7

Ceridian HCM Holding, Inc.

CDAY

Oct. 7

Gap, Inc.

GPS

Oct. 6

Motorola Solutions, Inc.

MSI

Oct. 6

RSailPoint Technology Holdings, Inc.

SAIL

Oct. 1

Martin Marietta Materials, Inc.

MLM

Sept. 30

Whirlpool Corp.

WHR

Sept. 29

Abercrombie & Fitch Co.

ANF

Sept. 29

Blueprint Medicines Co.

BPMC

Sept. 28

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

Elanco Animal Health, Inc.

ELAN

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

McDonald’s Corp.

MCD

Aug. 7

Industrial Select Sector SPDR

XLI

Aug. 6

Penn National Gaming, Inc.

PENN

July 30

Procter & Gamble Co.

PG

July 29

SPDR S&P Metals & Mining ETF

XME

July 28

iShares MSCI South Korea ETF

EWY

July 28

Advanced Micro Devices, Inc.

AMD

July 23

Best Buy Co., Inc.

BBY

July 22

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Roku, Inc.

ROKU

July 16

Cognizant Technology Solutions, Inc.

CTSH

July 16

Costco Wholesale Corp.

COST

July 15

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

FedEx Corp.

FDX

June 3

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

Facebook, Inc.

FB

May 7

Dollar General Corp.

DG

Apr. 28

ServiceNow, Inc.

NOW

Apr. 27

Five9, Inc.

FIVN

Apr. 24

Chewy, Inc.

CHWY

Apr. 24

Tesla, Inc.

TSLA

Apr. 23

VanEck Vectors Semiconductor ETF

SMH

Apr. 17

Veeva Systems, Inc.

VEEV

Apr. 17

Okta, Inc.

OKTA

Apr. 16

Target Corp.

TGT

Apr. 16

Invesco QQQ Trust

QQQ

Apr. 14

Apple, Inc.

AAPL

Mar. 27

Nvidia Corp.

NVDA

Mar. 27

iShares MSCI Emerging Markets ETF

EEM

Mar. 19

SPDR Gold Shares ETF

GLD

Jan. 2

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.

 

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