S and P 500 – Bullish momentum persists: S&P 500 (slightly) extends April breakout
U.S. stocks are mixed early Thursday, vacillating ahead of scheduled remarks from the Federal Reserve Chairman.
Against this backdrop, the S&P 500 has tagged its latest record high, though narrowly, while the Nasdaq Composite has extended an already-aggressive trendline breakout.
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 has sustained a decisive break atop the 4,000 mark. The April peak (4,086) has matched an intermediate-term target (4,085) detailed previously. (See the March 29 review.)
The S&P has extended early Thursday to tag a nominal new high atop the target.
Conversely, gap support — at 4,035 and 4,020 — is followed by the firmer breakout point (3,983).
Similarly, the Dow Jones Industrial Average
is digesting a break to record highs.
Here again, the flattish pullback from record territory signals still muted selling pressure. Bullish price action.
Tactically, the top of the gap (33,222) closely matches the breakout point and pivots to support.
Meanwhile, the Nasdaq Composite
has sustained a break to six-week highs.
Tactically, resistance matching the January peak (13,729) remains under siege.
Wednesday’s session high (13,733) registered nearby, and the Nasdaq has ventured comfortably atop resistance early Thursday. As always, it’s the session close that matters.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has knifed atop its trendline, and stuck near resistance matching the January peak (13,729).
This week’s muted selling pressure near resistance has opened the path to Thursday’s early follow-through.
On further strength, the 14,000 mark is followed by the Nasdaq’s record close (14,095) and absolute record peak (14,175).
More broadly, the prevailing upturn punctuates a late-March retest of the 2020 peak (12,973) preserving a bullish intermediate-term bias.
Looking elsewhere, the Dow Jones Industrial Average is holding record highs.
The index started April with a bull-flag breakout and has since sustained its gains amid muted selling pressure.
More broadly, the April breakout originates from the Dow’s former breakout point (32,009). The subsequent tandem flag patterns are technically constructive.
Meanwhile, the S&P 500 has sustained a sharp break atop the 4,000 mark.
The decisive breakout initially topped near the intermediate-term target (4,085) detailed previously. Three straight session highs registered within two points.
The bigger picture
As detailed above, the major U.S. benchmarks are acting well technically.
On a headline basis, the S&P 500 and Dow industrials are digesting aggressive April breakouts, while the Nasdaq Composite has sustained a rally to six-week highs.
The flattish mid-week pullback signals market bulls remain on offense. (See the hourly charts.)
Moving to the small-caps, the iShares Russell 2000 ETF
is off to a comparably sluggish April start.
Still, the prevailing range-bound price action is constructive, consistent with a rotational market backdrop. An extended test of the 50-day moving average remains underway.
True to recent form, the SPDR S&P MidCap 400 ETF
remains incrementally stronger.
As illustrated, the mid-cap benchmark is pressing record highs amid rotation away from the small-caps.
Looking elsewhere, the SPDR Trust S&P 500
has knifed to record highs after previously lagging slightly behind the small- and mid-caps.
An April flag-like pattern is forming amid decreased volume. Constructive price action.
Placing a finer point on the S&P 500, has flatlined in the wake of a decisive early-week breakout.
Recall three straight session highs have registered within two points of the intermediate-term target (4,085). (See the March 29 review.)
The S&P has followed through slightly atop the target early Thursday.
More broadly, the S&P 500’s aggressive early-April spike strengthens the bull case.
To start, the S&P has confirmed its uptrend with a steep 2.4% breakout.
Amid the upturn, the index has registered a statistically unusual two standard deviation breakout, encompassing consecutive closes atop its 20-day Bollinger bands.
Though still near-term extended — and a consolidation phase, of sorts, seems to be underway — the strong second-quarter start improves the chances of longer-term gains.
Against this backdrop, all technical trends continue to point higher pending signs of a bearish pulse.
Thursday’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 Communications Services Select Sector SPDR
is acting well technically. This is a concentrated ETF, with Alphabet, Inc. and Facebook, Inc. accounting for about a 43% combined weighting.
As illustrated, the group has edged to record highs, clearing resistance matching the March peak. A near-term target projects to the 80 area.
Conversely, trendline support tracks the 50-day moving average, and is rising toward the former range top (74.00). The prevailing uptrend is intact barring a violation.
Initially profiled March 27, 2020, Apple, Inc.
has returned 97.9% and remains well positioned.
Technically, the shares have rallied atop trendline resistance, rising to reclaim the breakdown point, circa 125.40.
Separately, the shares have registered a “higher high” versus the mid-March peak, and edged atop the 50-day moving average, currently 126.90.
The four events detailed — (trendline, breakdown point, higher high and 50-day average) — signal an intermediate-term trend shift.
Tactically, the breakout point, circa 125.40, is followed by trendline support currently matching the 200-day moving average. A sustained posture higher signals a bullish bias.
International Business Machines Corp.
is a well positioned Dow 30 component. (Yield = 4.8%.)
Late last month, the shares knifed to 52-week highs, clearing well-defined resistance.
The subsequent flag pattern has formed amid decreased volume, positioning the shares to build on the initial spike. A sustained posture atop the breakout point (131.70) signals a firmly-bullish bias.
More broadly, the shares are well positioned on the three-year chart, challenging the 200-week moving average from a bullish continuation pattern.
Nuance Communications, Inc.
is a large-cap developer of artificial intelligence and conversational software solutions.
Technically, the shares have rallied atop trendline resistance, rising to challenge the 50-day moving average, currently 45.28.
Follow-through atop the March range top (46.17) would mark a “higher high” — combined with the trendline breakout — more firmly signaling a trend shift. (Follow-through would also wreck the developing head-and-shoulders top.)
Tactically, the 100-day moving average, currently 44.40, has underpinned the April price action. A breakout attempt is in play barring a violation.
Initially profiled Oct. 16, ON Semiconductor Corp.
has returned 64.7% and remains well positioned.
As illustrated, the shares have knifed to record highs, clearing a two-month range top.
The subsequent pullback has been fueled by decreased volume, and underpinned by the breakout point (42.35). An intermediate-term target projects to the 48 area.
More broadly, the shares are well positioned on the three-year chart, reaching record highs from a flag-like pattern.
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|
|Analog Devices, Inc.||ADI||Apr. 7|
|ASML Holding N.V.||ASML||Apr. 7|
|Yum Brands, Inc.||YUM||Apr. 7|
|VMware, Inc.||VMW||Apr. 6|
|Autodesk, Inc.||ADSK||Apr. 6|
|Dollar Tree, Inc.||DLTR||Apr. 6|
|Qorvo, Inc.||QRVO||Apr. 5|
|VanEck Vectors Semiconductor ETF||SMH||Apr. 1|
|Lam Research Corp.||LRCX||Apr. 1|
|NetApp, Inc.||NTAP||Apr. 1|
|FedEx Corp.||FDX||Mar. 31|
|Air Products & Chemicals, Inc.||APD||Mar. 31|
|Vericel Corp.||VCEL||Mar. 31|
|U.S. Steel Corp.||X||Mar. 31|
|F5 Networks, Inc.||FFIV||Mar. 30|
|Ternium S.A.||TX||Mar. 30|
|Target Corp.||TGT||Mar. 30|
|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|
|Intel Corp.||INTC||Feb. 12|
|U.S. Global Jets ETF||JETS||Feb. 9|
|Motorola Solutions, Inc.||MSI||Feb. 9|
|Toll Brothers, Inc.||TOL||Feb. 2|
|Avis Budget Group, Inc.||CAR||Feb. 1|
|Capital One Financial Corp.||COF||Jan. 29|
|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|
|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.|
S and P 500 – Bullish momentum persists: S&P 500 (slightly) extends April breakout
Tags: S and P 500, S&P 500