Banking

Charting the S&P 500’s approach of the 4,000 mark

Technically speaking, the U.S. benchmarks’ bigger-picture backdrop remains bullish, on balance, though the prevailing market technicals are not one-size-fits-all.

Amid the cross currents, the S&P 500 has sustained a bullish reversal from major support, rising to challenge record highs, and within striking distance of the marquee 4,000 mark.

Charting the S&P 500’s approach of the 4,000 mark

Before detailing the U.S. markets’ wider view, the S&P 500’s
SPX,
-0.37%

 hourly chart highlights the past two weeks.

As illustrated, the S&P has rallied to the range top, rising to challenge record highs.

The prevailing upturn punctuates last week’s retest of the 50-day moving average.

More immediately, the Feb. peak (3,950) remains an inflection point, and is followed by the 3,915 support.

Charting the S&P 500’s approach of the 4,000 mark

Similarly, the Dow Jones Industrial Average
DJIA,
-0.32%

 has extended its rally attempt, rising to challenge record territory.

Here again, the prevailing upturn punctuates a bullish reversal from two-week lows.

Tactically, near-term inflection points in the 32,500 and 32,800 areas remain in play.

Charting the S&P 500’s approach of the 4,000 mark

Perhaps not surprisingly, the Nasdaq Composite
COMP,
-0.22%

remains the weakest major benchmark.

As illustrated, the index is not challenging record highs.

Instead, the index is vying to simply maintain major support matching the 2020 peak (12,973), an area also illustrated below. A potentially consequential retest remains underway.

Charting the S&P 500’s approach of the 4,000 mark

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has registered an extended test of major support (12,973).

The specific area matches the 2020 peak (12,973) a level that also marked the early-March breakdown point. (Recall the initial violation of the 2020 peak punctuated a head-and-shoulders top, a bearish pattern that was subsequently neutralized by the swift reversal back to the range, fueled by two 7-to-1 up days.)

Tactically, a sustained violation of support would signal a bearish intermediate-term bias.

Delving deeper, significant support (12,607) closely matches the March closing low (12,609). (See for instance, the Jan. 11 review.)

Charting the S&P 500’s approach of the 4,000 mark

Looking elsewhere, the Dow Jones Industrial Average remains the strongest major benchmark.

Recall that last week’s low (32,071) registered above the breakout point (32,009) to punctuate a successful retest.

The Dow has subsequently knifed from support, notching consecutive record closes.

More broadly, the index has registered directionally sharp March rallies, and a comparably flattish intervening pullback. Bullish momentum is intact.

Charting the S&P 500’s approach of the 4,000 mark

Meanwhile, the S&P 500 has staged a bullish reversal from its 50-day moving average.

The prevailing upturn places the marquee 4,000 mark within striking distance.

The bigger picture

Broadly speaking, the prevailing backdrop is largely bullish, though it is not one-size-fits-all.

On a headline basis, the S&P 500 and Dow industrials continue to press record territory.

Meanwhile, the Nasdaq Composite remains far from record highs, as it vies to simply maintain major support (12,973). A potentially consequential retest of this area remains underway.

Charting the S&P 500’s approach of the 4,000 mark

Moving to the small-caps, the iShares Russell 2000 ETF
IWM,
+1.36%

 has thus far weathered a respectable pullback from recent record highs.

Still, the small-cap benchmark has asserted a posture under its 50-day moving average (220.65) and the former range bottom (216.70).

Deeper inflection points match the March closing low (213.19) and absolute March low (207.21). An eventual violation would mark a “lower low” — and punctuate a modified double top — raising an intermediate-term caution flag.

Charting the S&P 500’s approach of the 4,000 mark

Meanwhile, the SPDR S&P MidCap 400 ETF
MDY,
+0.77%

 remains incrementally stronger.

As illustrated, the MDY has maintained a posture comfortably atop its 50-day moving average, outpacing the small-caps.

Separately, the prevailing bullish reversal has been punctuated by a rally atop the former breakout point.

Charting the S&P 500’s approach of the 4,000 mark

Looking elsewhere, the SPDR Trust S&P 500
SPY,
-0.40%

 has also reclaimed its breakdown point, an area matching the February peak.

The strong-volume bullish reversal punctuates a successful test of the 50-day moving average.

Charting the S&P 500’s approach of the 4,000 mark

Placing a finer point on the S&P 500, the index has rallied toward its range top, rising to challenge record highs.

The prevailing upturn punctuates a jagged test of major support (3,870) and the 50-day moving average, currently 3,881.

Within the range, the Feb. peak (3,950) remains an inflection point.

Charting the S&P 500’s approach of the 4,000 mark

More broadly, the prevailing bullish reversal places record highs under siege.

The S&P 500’s record close (3,974.54) and absolute record peak (3,983.87) rest just overhead, and are closely followed by the marquee 4,000 mark.

Also recall that near- to intermediate-term targets technically project to the 4,050 and 4,085 areas, detailed previously.

More broadly, the S&P 500’s successful retest of the 50-day moving average — combined with the prevailing series of “higher highs” and “higher lows” — signal a firmly-intact intermediate-term uptrend. The S&P 500’s path of least resistance continues to point higher.

Also see: Bull trend intact: S&P 500 retests the breakdown point.

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 S&P 500’s approach of the 4,000 mark

Drilling down further, the Materials Select Sector SPDR
XLB,
-0.33%

 is acting well technically. (Yield = 1.7%.)

As illustrated, the group has tagged a nominal record high. The prevailing upturn punctuates a tight mid-March range, as well as an extended February test of the 50-day moving average.

Tactically, the 50-day moving average, currently 75.35, is rising toward the range bottom (75.80). The prevailing rally attempt is firmly-intact barring a violation.

Charting the S&P 500’s approach of the 4,000 mark

Initially profiled March 2, Dow 30 component Boeing Co.
BA,
+0.47%

 has returned 11.6% and remains well positioned.

Earlier this month, the shares knifed to 52-week highs, clearing resistance matching the December peak. The subsequent pullback has been fueled by decreased volume, placing the shares 11.2% under the March peak.

Tactically, the breakout point, circa 240, is followed by the post-breakout low (231.70). A sustained posture higher signals a firmly-bullish bias.

Charting the S&P 500’s approach of the 4,000 mark

Target Corp.
TGT,
+0.55%

 is a large-cap retailer coming to life. (Yield = 1.4%.)

Technically, the shares have knifed atop trendline resistance, rising to challenge record territory.

The prevailing upturn has been fueled by tandem volume spikes — and subsequent sideways price action — laying the groundwork for a potential breakout.

Slightly more broadly, the shares are rising from a year-to-date range hinged to the steep early-January rally. An intermediate-term target projects to the 222 area on follow-through.

Charting the S&P 500’s approach of the 4,000 mark

F5 Networks, Inc.
FFIV,
-0.67%

 is a well positioned large-cap networking name.

As illustrated, the shares are challenging a three-month range top matching record highs. The prevailing range is underpinned by gap support. (See the early-January gap and subsequent retest.)

Tactically, near-term support (204.60) is followed by the 50-day moving average, a recent bull-bear inflection point. 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 hinged to the steep late-2020 rally.

Charting the S&P 500’s approach of the 4,000 mark

Finally, Ternium S.A.
TX,
+2.81%

 is a well positioned large-cap Luxembourg-based steel producer. (Yield = 5.5%.)

The shares started March with a strong-volume breakout, reaching 34-month highs. The subsequent orderly range is a bullish continuation pattern.

More immediately, the prevailing upturn has been fueled by increased volume, improving the chances of more decisive follow-through. Tactically, a near-term floor matches the former range top (34.50). 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.

Company

Symbol* (Click symbol for chart.)

Date Profiled

Texas Instruments, Inc.

TXN

Mar. 29

NXP Semiconductors N.V.

NXPI

Mar. 29

iShares U.S. Real Estate ETF

IYR

Mar. 29

Coca-Cola Co.

KO

Mar. 29

Home Depot, Inc.

HD

Mar. 26

Ferrari N.V.

RACE

Mar. 26

Funko Inc

FNKO

Mar. 26

Cisco Systems, Inc.

CSCO

Mar. 25

Steel Dynamics, Inc.

STLD

Mar. 25

Procter & Gamble Co.

PG

Mar. 25

Consumer Staples Select Sector SPDR

XLP

Mar. 25

iShares U.S. Home Construction ETF

ITB

Mar. 23

Lennar Corp.

LEN

Mar. 23

Jabil Circuit, Inc.

JBL

Mar. 23

Dish Network Corp.

DISH

Mar. 23

UnitedHealth Group, Inc.

UNH

Mar. 22

Shift4 Payments, Inc.

FOUR

Mar. 19

Whirlpool Corp.

WHR

Mar. 19

U.S. Bancorp

USB

Mar. 19

Nasdaq, Inc.

NDAQ

Mar. 18

D.R. Horton, Inc.

DHI

Mar. 18

Facebook, Inc.

FB

Mar. 17

AutoNation, Inc.

AN

Mar. 17

McDonald’s Corp.

MCD

Mar. 16

Virtu Financial, Inc.

VIRT

Mar. 16

Spirit Airlines, Inc.

SAVE

Mar. 16

LKQ Corp.

LKQ

Mar. 15

Anthem, Inc.

ANTM

Mar. 15

Walgreens Boots Alliance, Inc.

WBA

Mar. 12

International Paper Co.

IP

Mar. 12

iShares Europe ETF

IEV

Mar. 11

CME Group, Inc.

CME

Mar. 11

3M Co.

MMM

Mar. 11

Southwest Airlines Co.

LUV

Mar. 10

Big Lots, Inc.

BIG

Mar. 9

Alaska Air Group, Inc.

ALK

Mar. 9

State Street Corp.

STT

Mar. 8

American Eagle Outfitters, Inc.

AEO

Mar. 8

Hess Corp.

HES

Mar. 3

Beazer Homes USA, Inc.

BZH

Mar. 3

Mastercard, Inc.

MA

Mar. 2

Boeing Co.

BA

Mar. 2

Starbucks Corp.

SBUX

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

Chevron Corp.

CVX

Feb. 18

Lyft, Inc.

LYFT

Feb. 16

Intel Corp.

INTC

Feb. 12

U.S. Global Jets ETF

JETS

Feb. 9

Motorola Solutions, Inc.

MSI

Feb. 9

KeyCorp

KEY

Feb. 5

Diamondback Energy, Inc.

FANG

Feb. 4

CarMax, Inc.

KMX

Feb. 3

Toll Brothers, Inc.

TOL

Feb. 2

Avis Budget Group, Inc.

CAR

Feb. 1

Capital One Financial Corp.

COF

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

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

Williams-Sonoma, Inc.

WSM

Dec. 15

SDPR S&P Regional Banking ETF

KRE

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

Sonos, Inc.

SONO

Dec. 1

American Airlines Group, Inc.

AAL

Nov. 30

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

Micron Technology, Inc.

MU

Oct. 20

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

Crocs, Inc.

CROX

Sept. 14

Five Below, Inc.

FIVE

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

Industrial Select Sector SPDR

XLI

Aug. 6

SPDR S&P Metals & Mining ETF

XME

July 28

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

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, 2020

Microsoft Corp.

MSFT

Feb. 22, 2019

* Click each symbol for current chart.

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