Charting a bullish technical tilt, S&P 500 vies for third straight record close

Editors Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

The major U.S. benchmarks powerful 2017 uptrend remains firmly intact as year-end approaches.

Consider that the S&P 500 and Dow industrials have registered consecutive record closes, though narrowly, and both benchmarks are vying to build on statistically unusual November breakouts.

Before detailing the U.S. markets wider view, the S&P 500s
SPX, +0.15%
hourly chart highlights the past two weeks.

As illustrated, the S&P has rallied toward the range top, notching consecutive record closes. Its absolute record peak (2,665.19) is firmly within striking distance.

The prevailing upturn punctuates a successful test of near-term support (2,625), a level matching the S&Ps former technical target.

Similarly, the Dow Jones Industrial Average has registered consecutive record closes.

Here again, its more distant absolute record peak (24,534.04) rests just overhead.

Conversely, near-term support, circa 24,100, is followed by the Dows former technical target of 23,960.

Meanwhile, the Nasdaq Composite has yet to register all-time highs this month.

Still, the index has rallied respectably from two-week lows, rising to next resistance. Its record close (6,912.36) and absolute record peak (6,914.19) are within striking distance.

Recall that the prevailing upturn punctuates a successful test of trendline support, illustrated below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has rallied from trendline support, rising within striking distance of record territory.

(Consecutive weekly lows, at 6,737 and 6,734 respectively, also match near-term support.)

The prevailing series of higher lows and higher highs define the uptrend that continues to track slightly above the 50-day moving average.

Moving to the Dow, the blue-chip benchmarks backdrop remains stronger.

Recall that its November breakout was statistically unusual, encompassing five consecutive closes atop the 20-day volatility bands. (See the Dec. 5 review.)

The rally mirrored the steep September breakout, a move followed by a shallow consolidation phase, and powerful follow-through.

The recently comparable price action, punctuated by consecutive record closes, is technically constructive.

Similarly, the S&P 500 is digesting a statistically unusual late-year rally.

Its corresponding breakout encompassed four straight closes atop the 20-day volatility bands.

Here again, the S&Ps prevailing flag-like pattern has been punctuated by consecutive record closes.

The bigger picture

Broadly speaking, the U.S. benchmarks remain in divergence mode, though the bigger-picture backdrop is firmly bullish.

The Nasdaq Composite continues to lag slightly behind, though its rallied within view of all-time highs. Meanwhile, the stronger S&P 500 and Dow industrials have concurrently registered consecutive record closes.

Moving to the small-caps, the iShares Russell 2000 ETF
IWM, -0.31%
has pulled in from record territory.

Still, the downturn has been underpinned by first support. Recall that the breakout point, circa 150.50, closely matches the ascending 50-day moving average, currently 149.60.

Meanwhile, the SPDR S&P MidCap 400s backdrop remains incrementally stronger.

Consider that the December pullback has been flat, versus the steep November rally, and this weeks upturn places all-time highs within view. The MDYs record close (345.91) is closely followed by its absolute record peak (349.16).

Against this backdrop, the SPDR Trust S&P 500 has registered consecutive record closes.

Tactically, near-term support (262.70) is closely followed by the 20-day moving average, currently 261.90.

Summing up the backdrop

All told, the bigger-picture market technicals remain firmly bullish. Each benchmark has recently confirmed its primary uptrend, and the late-year selling pressure remains flat.

As it applies to the S&P 500, familiar technical floors stand out:

S&P support at 2,605, a level matching the breakout point, and the Dec. 1 reaction low. The 20-day moving average, currently 2,617. The S&P has notched just one close lower since Aug. 29. Near-term support at 2,625, a level matching the S&Ps initial projected target from the November breakout.

Combined, near-term support broadly spans from 2,605 to 2,625. The S&P 500s near-term uptrend is intact, barring a violation, against a firmly-bullish longer-term backdrop.

See also: Charting a bull-trend breakout, S&P 500 clears the 20-day volatility bands.

Tuesdays 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.

Profiled last week, the SDPR Gold Trust
GLD, +0.12%
has extended the December downdraft.

In the process, the shares have reached four-month lows, also placing distance under the 200-day moving average.

To reiterate, the GLDs next notable floor matches the July low (114.80), an area better illustrated on the two-year chart. Conversely, a reversal atop the 200-day moving average, currently 121.35, would mark an early step toward stabilization.

Moving to U.S. sectors, the Consumer Staples Select Sector SPDR
XLP, +0.02%
is acting well technically. (Yield = 2.7%.)

Late last month, the group cleared trendline resistance, and the 200-day moving average, rising to five-month highs. The straightline rally was fueled by a sustained volume increase, and signals a primary trend shift.

Tactically, the breakout point (55.90) pivots to support, and is followed by the 200-day moving average, currently 55.05. (See the July low and October peak.) The groups recovery attempt is intact barring a violation.

Looking elsewhere, the Energy Select Sector SPDR
XLE, -0.27%
is another formerly lagging sector showing signs of life.

As illustrated, the group staged two steep November spikes, knifing atop the 200- and 50-day moving averages respectively. Both rallies punctuated a successful test of the breakout point.

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

Against the current backdrop, the 50-day moving average pivots to support, currently 68.40, and a breakout attempt is in play barring a violation.

Moving to specific names, VeriSign, Inc.
VRSN, +0.04%
is a large-cap provider of domain registry and Internet security services.

Late last month, the shares knifed to 16-year highs, clearing resistance matching the October peak.

The ensuing pullback has been comparably flat, underpinned by trendline support matching the breakout point. Tactically, the 50-day moving average, currently 111.00, defines the trend, and a posture higher supports a bullish bias.

Nordstrom, Inc.
JWN, -0.22%
is a large-cap retailer coming to life.

Technically, the shares have recently staged a strong-volume spike, clearing the 200-day moving average and trendline resistance. The breakout raises the flag to a primary trend shift.

The ensuing flag-like pattern positions the shares to extend the rally. Tactically, the 200-day moving average pivots to support (44.80) and the recovery attempt is intact barring a violation.

Catalyst Pharmaceuticals, Inc.
CPRX, -0.71%
is a well positioned small-cap name.

As illustrated, the shares have recently launched to two-year highs, rising after the company reported positive Phase 3 trial results for its autoimmune disorder treatment.

The subsequent bull flag is a continuation pattern, improving the chances of incremental follow-through. Tactically, the December closing low (4.00) matches near-term support, and the late-year rally is intact barring a violation.

Editors Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

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 Date Profiled
F5 Networks, Inc. FFIV Dec. 11
Best Buy Co. BBY Dec. 11
Lowes Companies, Inc. LOW Dec. 11
PNC Financial Services Group, Inc. PNC Dec. 11
Bank of America Corp. BAC Dec. 8
Kansas City Southern KSU Dec. 8
Global Blood Therapeutics, Inc. GBT Dec. 8
Verizon Communications, Inc. VZ Dec. 7
Bed Bath & Beyond, Inc. BBBY Dec. 7
Regions Financial Corp. RF Dec. 7
KeyCorp KEY Dec. 6
Kohls Corp. KSS Dec. 6
CNX Resourcers Corp. CNX Dec. 6
Norfolk Southern Corp. NSC Dec. 4
Medtronic plc MDT Dec. 4
East West Bancorp, Inc. EWBC Dec. 4
Portola Pharmaceuticals, Inc. PTLA Dec. 4
Caterpillar, Inc. CAT Dec. 1
Kulicke and Soffa Industries, Inc. KLIC Dec. 1
iShares Transportation Average ETF IYT Nov. 30
SPDR S&P Regional Banking ETF KRE Nov. 29
Macys, Inc. M Nov. 29
Copa Holdings, S.A. CPA Nov. 29
International Game Technology IGT Nov. 29
Loews Corp. L Nov. 29
Nuance Communications, Inc. NUAN Nov. 28
NetEase, Inc. NTES Nov. 27
Advance Auto Parts, Inc. AAP Nov. 27
AutoNation, Inc. AN Nov. 27
Walt Disney Co. DIS Nov. 22
FleetCor Technologies, Inc. FLT Nov. 21
SPDR S&P Retail ETF XRT Nov. 20
Abercrombie & Fitch Co. ANF Nov. 20
American Eagle Outfitters, Inc. AEO Nov. 20
MSCI, Inc. MSCI Nov. 20
Verisk Analytics, Inc. VRSK Nov. 20
Halozyme Therapeutics, Inc. HALO Nov. 16
SkyWest, Inc. SKYW Nov. 16
Consumer Discretionary SPDR XLY Nov. 14
iShares MSCI South Korea ETF EWY Nov. 14
Motorola Solutions, Inc. MSI Nov. 14
Skechers U.S.A., Inc. SKX Nov. 13
Polaris Industries, Inc. PII Nov. 13
Tractor Supply Co. TSCO Nov. 13
Splunk, Inc. SPLK Nov. 9
Aimmune Therapeutics, Inc. AIMT Nov. 9
iShares U.S. Real Estate ETF IYR Nov. 8
Teradata Corp. TDC Nov. 7
Corning, Inc. GLW Nov. 7
InterXion Holding, N.V. INXN Nov. 6
Yum Brands, Inc. YUM Nov. 6
First Solar, Inc. FSLR Nov. 3
Twitter, Inc. TWTR Nov. 1
Ambarella, Inc. AMBA Nov. 1
Melco Resorts & Entertainment Limited MLCO Nov. 1
Broadcom Limited AVGO Oct. 31
Akamai Technologies, Inc. AKAM Oct. 30
Cisco Systems, Inc. CSCO Oct. 25
Mosaic Co. MOS Oct. 25
Builders FirstSource, Inc. BLDR Oct. 25
STMicroelectronics N.V. STM Oct. 24
Marvell Technology Group, Ltd. MRVL Oct. 24
Lululemon Athletica, Inc. LULU Oct. 24
PPG Industries, Inc. PPG Oct. 23
SPDR S&P Homebuilders ETF XHB Oct. 20
Travelers Companies, Inc. TRV Oct. 20
Johnson & Johnson JNJ Oct. 20
Steel Dynamics, Inc. STLD Oct. 20
Michael Kors Holdings Limited KORS Oct. 18
Spectrum Pharmaceuticals, Inc. SPPI Oct. 17
Marathon Oil Corp. MRO Oct. 17
SM Energy Co. SM Oct. 16
Nutanix, Inc. NTNX Oct. 16
Dollar General DG Oct. 16
Paychex, Inc. PAYX Oct. 13
Union Pacific Corp. UNP Oct. 12
International Business Machines Corp. IBM Oct. 11
Ford Motor Co. F Oct. 11
3M Co. MMM Oct. 5
LGI Homes, Inc. LGIH Oct. 5
HubSpot, Inc. HUBS Oct. 4
SolarEdge Technologies, Inc. SEDG Oct. 4
Intel Corp. INTC Oct. 3
Citrix Systems, Inc. CTXS Oct. 3
XPO Logistics, Inc. XPO Oct. 2
EOG Resources, Inc. EOG Oct. 2
Neurocrine Biosciences, Inc. NBIX Oct. 2
FedEx Corp. FDX Sept. 29
YY, Inc. YY Sept. 29
Nvidia Corp. NVDA Sept. 27
Financial Select Sector SPDR XLF Sept. 26
Texas Instruments, Inc.

Leave a Reply

Your email address will not be published.

Hawaiian Holdings' (HA) Q3 View Dims on Delta Variant-Led Woes

2023-05-28 21:30:31

Why Should You Hold Assurant (AIZ) Stock in Your Portfolio?

2023-05-28 19:30:13

Here's Advertisement