U.S. stocks are lower early Friday — though off the session’s worst levels — pressured amid virus concerns, and a not well-received batch of influential earnings reports.
Against this backdrop, the S&P 500 and Nasdaq Composite continue to digest respectable mid-week rallies to record territory, against an otherwise bullish bigger-picture backdrop.
Before detailing the U.S. markets’ wider view, the S&P 500’s
hourly chart highlights the past two weeks.
As illustrated, the S&P is digesting its latest break to record territory. Tactically, the breakout point (3,826) is closely followed by the top of the gap (3,816).
Friday’s early session low (3,830) has registered slightly above the breakout point.
Delving deeper, the prevailing upturn originates from the 20-day moving average and near-term support (3,764).
Meanwhile, the Dow Jones Industrial Average
has struggled to break out.
Though the index has narrowly tagged all-time highs — across consecutive sessions — the former range top (31,236) remains a sticking point.
A pulling-teeth breakout attempt technically remains underway.
Against this backdrop, the Nasdaq Composite
has staged this week’s most decisive breakout.
The prevailing upturn punctuates a flag-like pattern — the former eight-session range — underpinned by the breakout point (12,973).
Recall that last week’s price action was punctuated by consecutive successful tests of the breakout point (12,973).
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has extended a bull-flag breakout, knifing to all-time highs.
The two-session spike marks a 2.3% technical breakout, confirming the primary uptrend.
Separately, the prevailing upturn also marks a two standard deviation breakout, encompassing consecutive closes atop the 20-day volatility bands.
Though near-term extended — and a consolidation phase seems to be underway Friday — the statistically unusual bullish momentum improves the prospects of longer-term follow-through.
Also recall that the Nasdaq registered the least decisive early-January breakout of the major U.S. benchmarks. The prevailing catch-up trade, versus the other benchmarks, signals a still rotational market backdrop. Constructive price action.
Looking elsewhere, the Dow Jones Industrial Average has tagged nominal record highs this week — across consecutive sessions — though decisive follow-through remains elusive.
Nonetheless, recall that its early-January breakout marked the statistically strongest of the major U.S. benchmarks. (The Dow registered three straight closes atop its 20-day Bollinger bands to start the new year.)
So here again, the Dow’s comparably sluggish prevailing breakout attempt — versus that of the Nasdaq Composite — is consistent with a healthy rotational market backdrop.
Meanwhile, the S&P 500 has registered respectable follow-through this week.
The prevailing bull-flag breakout originates from near-term support (3,764) and the 20-day moving average.
The bigger picture
Broadly speaking, the major U.S. benchmarks continue to trend higher amid still largely constructive bigger-picture price action.
Each big three benchmark has notched at least one record close this week, though amid breakout attempts ranging from distinctly bullish (Nasdaq Composite) to comparably lackluster (Dow industrials).
Collectively, each benchmark’s intermediate-term bias remains comfortably bullish.
Moving to the small-caps, the iShares Russell 2000 ETF
continues to consolidate in grinding-higher form.
The small-cap benchmark tagged a nominal record close, and absolute record peak Wednesday, before pulling in amid decreased volume. Selling pressure remains flat.
Similarly, the SPDR S&P MidCap 400 ETF
is digesting recent slow-motion follow-through.
Combined, the persistent small- and mid-cap strength — and recent relative outperformance — is also consistent with rotational market price action.
Looking elsewhere, the SPDR Trust S&P 500
has staged a bull-flag breakout, reaching a higher plateau.
Recall that the prevailing upturn originates from the 20-day moving average.
Placing a finer point on the S&P 500, the index is digesting a respectable break to all-time highs.
To reiterate, the breakout point (3,826) marks the S&P’s first notable floor.
Friday’s early session low (3,830) has registered nearby.
More broadly, the prevailing upturn punctuates a bull flag, the preceding tight eight-session range. A near-term S&P target continues to project to the 3,890-to-3,900 area.
Conversely, the breakout point (3,826) is followed by familiar near-term support (3,746).
Delving deeper, the ascending 50-day moving average, currently 3,694, is rising toward major support in the 3,723-to-3,726 area. Tactically, an eventual violation of these areas would likely raise a technical caution flag.
Beyond specific levels, the S&P 500’s intermediate-term bias remains bullish, based on today’s backdrop.
Friday’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.
Drilling down further, the Invesco Solar ETF
is acting well technically.
Earlier this month, the shares gapped to record highs, rising amid a volume spike after the Georgia Senate runoff elections resulted in a potential pending policy tailwind.
The ensuing pullback has been orderly, underpinned by gap support (106.89). (The post-breakout low (106.88) registered within a penny of the bottom of the gap.)
More immediately, the prevailing upturn places the group’s record high (123.66) within view. A near- to intermediate-term target projects to the 140 area on follow-through.
Initially profiled March 27 — and revisited Dec. 23 — Apple, Inc.
has returned 111.8% and remains well positioned.
As illustrated, the shares have rallied to the range top, rising to challenge all-time highs. Thursday’s close (136.87) marked a record close, by a narrow 22-cent margin.
The prevailing upturn punctuates a successful test of the breakout point (125.40) amid a developing cup-and-handle, defined by the September and January lows.
Tactically, the response to the range top should be a useful bull-bear gauge. As always, the chances of a breakout improve to the extent the shares hold tightly to resistance. An intermediate-term target projects to the 260 area on follow-through.
Note that the company’s quarterly results are due out Wednesday, Jan. 27.
(More broadly, and on a granular note, recall that the December breakout punctuated a modified double bottom — the W formation — defined by the September and November lows. The prevailing January range has been underpinned by the breakout point. A target projected from the double bottom to the 142 area, and is firmly within view.)
Magna International, Inc.
is a large-cap Canada-based auto parts and components manufacturer. (Yield = 2.1%.)
The shares initially spiked four weeks ago, gapping higher after the company announced a joint venture with LG Electronics to develop electric vehicle parts.
By comparison, the subsequent pullback has been orderly — effectively underpinned by the top of the gap — positioning the shares to build on the initial strong-volume spike.
More immediately, the prevailing upturn places record highs under siege. A near-term target projects to the 81 area on follow-through.
Initially profiled Aug. 24, Deere & Co.
has returned 48.7% and remains well positioned.
The shares started the year with a bull-flag breakout, knifing to all-time highs from a tight late-December range.
More immediately, the prevailing flag-like pattern signals still muted selling pressure at record territory.
Tactically, the post-breakout low (289.00) is followed by the ascending 50-day moving average. A sustained posture higher signals a bullish intermediate-term bias.
Finally, M.D.C. Holdings, Inc.
is a mid-cap homebuilder coming to life. (Yield = 2.9%.)
As illustrated, the shares have knifed to record highs, clearing resistance matching the October and December peaks amid pronounced sector strength.
Though still near-term extended, the aggressive two standard deviation breakout is longer-term bullish. A sustained posture atop the breakout point (51.80) signals a comfortably 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|
|Electronic Arts, Inc.||EA||Jan. 21|
|Bed Bath & Beyond, Inc.||BBBY||Jan. 21|
|PVH Corp.||PVH||Jan. 21|
|Schlumberger Limited||SLB||Jan. 20|
|Sunnova Energy International, Inc.||NOVA||Jan. 19|
|Reliance Steel & Aluminum Co.||RS||Jan. 19|
|Alaska Air Group, Inc.||ALK||Jan. 15|
|Chevron Corp.||CVX||Jan. 15|
|Zebra Technologies Corp.||ZBRA||Jan. 14|
|Juniper Networks, Inc.||JNPR||Jan. 14|
|Chegg, Inc.||CHGG||Jan. 11|
|Ambarella, Inc.||AMBA||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|
|Dollar Tree, Inc.||DLTR||Jan. 8|
|Skyworks Solutions, Inc.||SWKS||Jan. 7|
|Financial Select Sector SPDR||XLF||Jan. 7|
|FireEye, Inc.||FEYE||Jan. 5|
|Check Point Software Technologies||CHKP||Jan. 4|
|Synaptics, Inc.||SYNA||Jan. 4|
|Ceridian HCM Holding, Inc.||CDAY||Jan. 4|
|Sunrun, Inc.||RUN||Dec. 23|
|ShockWave Medical, Inc.||SWAV||Dec. 23|
|JPMorgan Chase & Co.||JPM||Dec. 22|
|Coupa Software, Inc.||COUP||Dec. 22|
|PagSeguro Digital Ltd.||PAGS||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|
|Cerner Corp.||CERN||Dec. 17|
|Tenet Healthcare Corp.||THC||Dec. 16|
|Sunnova Energy International, Inc.||NOVA||Dec. 16|
|Toyota Motor Co.||TM||Dec. 15|
|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|
|Surface Oncology, Inc.||SURF||Dec. 14|
|Autodesk, Inc.||ADSK||Dec. 9|
|Monster Beverage Corp.||MNST||Dec. 9|
|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|
|Honeywell International, Inc.||HON||Dec. 7|
|Dillard’s, Inc.||DDS||Dec. 4|
|Caleres, Inc.||CAL||Dec. 4|
|Spotify Technology S.A.||SPOT||Dec. 3|
|Align Technology, Inc.||ALGN||Dec. 3|
|Valero Energy Corp.||VLO||Dec. 3|
|Analog Devices, Inc.||ADI||Dec. 2|
|Cirrus Logic, Inc.||CRUS||Dec. 1|
|Sonos, Inc.||SONO||Dec. 1|
|Dollar Tree, Inc.||DLTR||Dec. 1|
|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|
|Zillow Group, Inc.||ZG||Nov. 23|
|Yeti Holdings, Inc.||YETI||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|
|RingCentral, Inc.||RNG||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|
|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|
|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|
|Twilio, Inc.||TWLO||Oct. 8|
|Cloudflare, Inc.||NET||Oct. 7|
|Ceridian HCM Holding, Inc.||CDAY||Oct. 7|
|RSailPoint 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|
|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|
|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|
|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|
|Cognizant Technology Solutions, Inc.||CTSH||July 16|
|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|
|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|
|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.|