Banking

Market rotation persists: Nasdaq takes flight to record highs

Technically speaking, the major U.S. benchmarks continue to trend higher amid firmly-bullish late-year price action.

Against this backdrop, the Nasdaq Composite has extended a break to record territory — placing distance atop the 12,000 mark — while the S&P 500 is starting December with its latest breakout attempt.

Market rotation persists: Nasdaq takes flight to record highs

Before detailing the U.S. markets’ wider view, the S&P 500’s
SPX,
+1.44%
 hourly chart highlights the past two weeks.

As illustrated, the S&P has asserted a three-week range hinged to the double bottom defined by the September and October lows.

The flag-like pattern has been punctuated by Tuesday’s early follow-through to record territory. Bullish price action.

Market rotation persists: Nasdaq takes flight to record highs

Similarly, the Dow Jones Industrial Average
DJIA,
+0.97%
 has pulled in to its range from last week’s record high.

Tactically, the February peak (29,568) marks an inflection point — formerly the Dow’s record high — also detailed on the daily chart.

Conversely, notable overhead matches the former range top (29,964) established last month.

Market rotation persists: Nasdaq takes flight to record highs

Against this backdrop, the Nasdaq Composite
COMP,
+1.55%
has taken flight, knifing to record territory.

The index registered consecutive record closes last week, and slipped just seven points Monday, to punctuate an intraday whipsaw.

Tactically, the 12,108-to-12,114 area marks a near-term floor, levels matching the early-November peak and gap support.

Market rotation persists: Nasdaq takes flight to record highs

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has cleared its range top, reaching uncharted territory.

The upturn marks about a 1.2% breakout, confirming the primary uptrend.

Tactically, the breakout point (12,074) is followed by deeper support at 11,950, an area better illustrated on the hourly chart.

Market rotation persists: Nasdaq takes flight to record highs

Looking elsewhere, the Dow Jones Industrial Average is digesting unusually strong November gains.

In fact, the blue-chip benchmark just notched its best monthly performance since 1987 and its best November performance since 1928. (Both prior records were punctuated by market crashes, about nine to 12 months later, respectively.)

Still, the Dow in the current case had been working from a low base. Recall the successful test of its 200-day moving average at the October low, and subsequent snap-back to record territory.

More immediately, the Dow registered a single close atop the 30,000 mark last week for the first time on record.

It has since generally held the range top in the broad sweep. A near-term target projects from the prevailing range to the 30,700 mark.

Market rotation persists: Nasdaq takes flight to record highs

Meanwhile, the S&P 500 has registered record closes across two of the prior four sessions.

Tactically, gap support (3,594) is closely followed by the September peak (3,588).

Monday’s session low (3,594) matched gap support. (Also see the hourly chart.)

The bigger picture

Collectively, the major U.S. benchmarks continue to trend higher amid a still comfortably bullish bigger-picture backdrop.

On a headline basis, the Nasdaq Composite has broken out, reaching record territory atop the 12,000 mark.

Against this backdrop, each big three U.S. benchmark has registered a record close at some point across the prior four sessions.

Market rotation persists: Nasdaq takes flight to record highs

Moving to the small-caps, the iShares Russell 2000 ETF is digesting a late-November break to record territory.

The prevailing leg higher builds on its initially decisive early-November breakout.

Market rotation persists: Nasdaq takes flight to record highs

Similarly, the SPDR S&P MidCap 400 ETF has sustained its latest rally to record highs.

Here again, the MDY’s recent breakout punctuates a mid-November flag-like pattern.

Market rotation persists: Nasdaq takes flight to record highs

Looking elsewhere, the SPDR Trust S&P 500 is holding its range top.

As detailed repeatedly, the prevailing flag-like pattern is hinged to a double bottom — the W formation — defined by the September and October lows. Constructive price action.

Market rotation persists: Nasdaq takes flight to record highs

Placing a finer point on the S&P 500, the index has generally held its range top, notching record closes across two of the prior four sessions.

Tactically, Monday’s session low (3,594) matched the top of the gap (3,594).

Separately, the recent upturn punctuates a three-session range, effectively defined by the September and October peaks.

Market rotation persists: Nasdaq takes flight to record highs

More broadly, the prevailing upturn punctuates a flag-like pattern hinged to the steep early-November rally. (The current pattern is a bit long for a flag, but it’s still a bullish continuation pattern.)

Tactically, the S&P has surpassed its absolute record peak (3,645.99) early Tuesday.

The breakout places it in previously uncharted territory, capped by no true resistance. To reiterate, an intermediate-term target projects to the 3,800 area on follow-through.

Beyond technical levels, each big three benchmark’s intermediate-term path of least resistance continues to point higher pending signs of a bearish pulse.

Also see: Charting a bullish technical tilt: Dow 30,000 and Nasdaq 12,000 under siege.

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.

Market rotation persists: Nasdaq takes flight to record highs

Initially profiled Nov. 5, the Communications Services Select Sector SPDR
XLC,
+2.28%
 has edged slightly higher and remains well positioned.

Fundamentally, the group may benefit from a December re-rotation toward technology in the wake of strong November gains across other sectors. (Recall the Nasdaq’s recent breakout after previously lagging slightly behind.)

Against this backdrop, the group is digesting a modest break to record territory.

Tactically, the breakout point (65.20) is followed by the group’s former range top, circa 62.60. The prevailing uptrend is firmly-intact barring a violation.

Market rotation persists: Nasdaq takes flight to record highs

Looking elsewhere, the Health Care Select Sector SPDR is acting well technically.

The group initially spiked four weeks ago, staging a nearly straightline rally to all-time highs. The upturn punctuates a double bottom — the W formation — underpinned by the 200-day moving average.

More immediately, the prevailing pullback has been underpinned by the top of the gap (107.74) placing the group at an attractive entry 4.3% under the November peak. (The post-breakout low registered just six cents above gap support.)

Market rotation persists: Nasdaq takes flight to record highs

Initially profiled July 23, Advanced Micro Devices, Inc.
AMD,
-0.01%
 has returned 49.9% and remains well positioned.

Technically, the shares have cleared a three-month range top, rising to tag a record close on increased volume. The upturn punctuates a double bottom defined by the September and November lows. An intermediate-term target projects to the 101 area.

Conversely, the breakout point, circa 88.00, pivots to support. A sustained posture higher signals a firmly-bullish bias.

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

Market rotation persists: Nasdaq takes flight to record highs

Cirrus Logic, Inc.
CRUS,
+2.16%
 is a well positioned mid-cap fabless semiconductor name and an Apple, Inc. supplier.

As illustrated, the shares have reached nine-month highs, clearing resistance matching the April peak (78.46) and November peak (78.48).

More broadly, the strong-volume upturn punctuates a November flag-like pattern hinged to a double bottom defined by the June and September peaks. Tactically, the prevailing rally attempt is intact barring a violation of the breakout point (78.50).

Market rotation persists: Nasdaq takes flight to record highs

Dollar Tree, Inc.
DLTR,
+1.97%
 is a well positioned large-cap discount retailer.

Late last month, the shares gapped to 52-week highs, rising sharply after the company’s strong third-quarter results.

The ensuing pullback has been comparably flat, placing the shares 3.4% under the November peak.

Tactically, the top of the gap (105.00) is closely followed by the breakout point (104.60). A posture higher signals a bullish bias.

Market rotation persists: Nasdaq takes flight to record highs

Finally, Sonos, Inc.
SONO,
+0.38%
 is a mid-cap manufacturer of wireless speakers and related accessories.

As illustrated, the shares have recently gapped sharply higher, rising amid a volume spike after the company’s quarterly results. The breakout places the shares at two-year highs, the best levels since the week the company went public.

The initial spike (long white bar) has been punctuated by five inside days — and this week’s slight follow-through — positioning the shares to build on the breakout. Tactically, gap support (20.20) is closely followed by the post-breakout low (20.01). A posture higher signals a bullish bias.

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

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

Coca-Cola Co.

KO

Nov. 24

SPDR S&P Homebuilders ETF

XHB

Nov. 24

Zillow Group, Inc.

ZG

Nov. 23

Yeti Holdings, Inc.

YETI

Nov. 23

Carvana Co.

CVNA

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

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

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

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

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

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

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.

 

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