Stock Market News – Bull trend pauses: S&P 500, Nasdaq digest breaks to uncharted territory
U.S. stocks are mixed early Wednesday, treading water after a generally strong batch of quarterly earnings reports and ahead of scheduled remarks by the Federal Reserve Chairman.
Against this backdrop, each big three U.S. benchmark is digesting its latest break to record territory amid thus far muted mid-week selling pressure.
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 recent break to record highs.
Tactically, the breakout point (3,870) marks the first real support, and is followed by an inflection point in the 3,830 area.
Meanwhile, the Dow Jones Industrial Average
has sustained a less-decisive breakout.
Tactically, the former range top — the 31,236-to-31,272 area — marks a notable floor.
Wednesday’s early session low (31,221) has registered nearby amid a retest that remains underway.
Against this backdrop, the Nasdaq Composite
remains the strongest major benchmark.
The index has registered four straight record closes, a rally punctuated by Tuesday’s slight break atop the 14,000 mark.
Tactically, the Nasdaq’s breakout point (13,730) marks its first notable floor.
More broadly, recall that the prevailing upturn originates from major support (12,973) also illustrated on the daily chart below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has staged a nearly straightline February spike to the 14,000 mark.
Consider that the bullish reversal — from the 13,000 mark — has spanned just over 1,000 points, or about 7.9%, across just eight sessions.
Though near-term extended, and due to consolidate, the Nasdaq’s 2.0% technical breakout confirms its primary uptrend.
Recall that the prevailing upturn originates from support matching the 2020 peak (12,973).
Looking elsewhere, the Dow Jones Industrial Average has inched to record territory.
More directly, the index has registered a less than 0.4% breakout, not yet confirming its uptrend.
Nonetheless, the slight break to record highs — and thus far flat subsequent selling pressure — is technically constructive.
Recall that the prevailing upturn originates from last-ditch support (29,964), and punctuates decisive follow-through atop its former breakdown point (30,283). (Also see the hourly chart.)
Meanwhile, the S&P 500’s follow-through almost precisely splits the difference between that of the other benchmarks.
Specifically, the index has registered a 1.2% technical breakout, sufficient to confirm its primary uptrend.
The bigger picture
Collectively, the U.S. benchmarks’ bigger-picture backdrop remains comfortably bullish.
On a headline basis, each big three benchmark has tagged record highs, though amid breakouts that admittedly get mixed marks for style.
The Nasdaq Composite and S&P 500 have confirmed their primary uptrends — rising amid reasonably decisive breakouts — while Dow Jones Industrial Average technically needs incremental follow-through to confirm its primary trend.
Slightly more broadly, each benchmark has punctuated a V-shaped reversal from major support.
Moving to the small-caps, the iShares Russell 2000 ETF
has truly taken flight, notching a massive 4.8% February breakout.
Against this backdrop, upturn marks an unusual two standard deviation breakout, encompassing four straight closes atop the 20-day Bollinger bands.
Though due to consolidate at some point, the extreme bullish momentum is likely longer-term bullish.
Meanwhile, the SPDR S&P MidCap 400 ETF
has also reached record highs, though less decisively.
Specifically, the MDY has registered a single close atop the 20-day volatility bands amid a two standard deviation breakout.
Recall that the prevailing upturn originates from the breakout point (425.30), a level closely matching the 2020 peak.
Looking elsewhere, the SPDR Trust S&P 500
is digesting a break to record territory.
Thus far flattish mid-week selling pressure punctuates a V-shaped reversal from major support.
Placing a finer point on the S&P 500, the index has snapped a stretch of three straight record closes.
But here again, the index has initially drawn muted selling pressure in previously uncharted territory.
Tactically, the breakout point (3,870) remains the S&P’s first notable floor.
More broadly, the S&P is digesting a respectable 1.2% February breakout to punctuate a bullish V-shaped reversal.
Recall that the late-January event-fueled downturn — amid short-covering drama — stalled near major support matching the late-December breakout point (3,823) and the 50-day moving average. (The downturn marked the strongest in about three months.)
On further strength, a near-term target continues to project from the S&P’s late-January range to the 4,010 area, about 2.5% above current levels.
Conversely, the S&P’s breakout point (3,870) is followed by deeper support in the 3,830 area.
Beyond specific levels, the S&P 500’s intermediate-term path of least resistance continues to point higher pending more technically aggressive selling pressure.
Wednesday’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 Industrial Select Sector SPDR
has reached a major technical test. (Yield = 4.8%.)
Specifically, the group is pressing a nearly three-month range top matching all-time highs.
The prevailing upturn originates from support roughly matching the November gap and the 100-day moving average. An intermediate-term target projects to the 96 area on follow-through.
More broadly, the shares are well positioned on the three-year chart, rising from a continuation pattern hinged to the 2020 V-shaped reversal.
Moving to specific names, Zoom Video Communications, Inc.
is a large-cap name showing signs of life.
The shares initially turned higher about four weeks ago, clearing trendline resistance on increased volume.
The subsequent tight range has been punctuated by recent follow-through atop the 50-day moving average — confirming the trend shift — and a break to two-month highs.
Tactically, the breakout point, circa 419.00, is followed by the 50-day moving average, currently 387.00. The prevailing rally attempt is intact barring a violation.
Initially profiled Jan. 7, Skyworks Solutions, Inc.
has returned 12.4% and remains well positioned.
Late last month, the shares knifed to record territory, rising after the company reported its quarterly results and disclosed a $2 billion buyback plan.
The subsequent flag pattern (of sorts) has formed amid decreased volume, positioning the shares to build on the initial spike. Tactically, near-term support (179.10) is followed by the post-breakout low (172.90). A sustained posture higher signals a firmly-bullish bias.
is a Dow 30 component coming to life technically. (Yield = 2.4%.)
As illustrated, the shares have rallied atop trendline resistance, rising to challenge a 10-week range top.
Underlying the upturn, its relative strength index (not illustrated) has registered its best levels since October — but remains in neutral territory — improving the chances of an eventual breakout.
Slightly more broadly, the prevailing breakout attempt originates from a successful test of the 200-day moving average at the January low. An intermediate-term target projects to the 225 area on follow-through.
Finally, Hologic, Inc.
is a large-cap developer of diagnostic products and medical imaging systems.
Late last month, the shares knifed to record highs, rising after the company’s strong first-quarter results.
The subsequent pullback has been flat, fueled by decreased volume, placing the shares near the breakout point (80.50) and 4.7% under the February peak.
Tactically, trendline support roughly tracks the 50-day moving average, and is rising toward the former range top (77.50). The prevailing uptrend is intact barring a violation.
Slightly more broadly, the prevailing upturn originates from a bullish island reversal defined by gaps near the 50-day moving average at the January low.
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|
|U.S. Global Jets ETF||JETS||Feb. 9|
|Lowe’s Companies, Inc.||LOW||Feb. 9|
|Motorola Solutions, Inc.||MSI||Feb. 9|
|iShares U.S. Home Construction ETF||ITB||Feb. 8|
|Lennar Corp.||LEN||Feb. 8|
|Nike, Inc.||NKE||Feb. 8|
|Beyond Meat, Inc.||BYND||Feb. 8|
|Cisco Systems, Inc.||CSCO||Feb. 5|
|Datadog, Inc.||DDOG||Feb. 5|
|Appian Corp.||APPN||Feb. 4|
|Diamondback Energy, Inc.||FANG||Feb. 4|
|Gogo, Inc.||GOGO||Feb. 4|
|Wix.com, Ltd.||WIX||Feb. 3|
|CarMax, Inc.||KMX||Feb. 3|
|Sierra Wireless||SWIR||Feb. 3|
|Toll Brothers, Inc.||TOL||Feb. 2|
|Eagle Materials, Inc.||EXP||Feb. 2|
|Avis Budget Group, Inc.||CAR||Feb. 1|
|Capital One Financial Corp.||COF||Jan. 29|
|NetApp, Inc.||NTAP||Jan. 29|
|Aptiv, plc||APTV||Jan. 29|
|Rio Tinto Group||RIO||Jan. 26|
|Sorrento Therapeutics, Inc.||SRNE||Jan. 26|
|Netflix, Inc.||NFLX||Jan. 25|
|Cummins, Inc.||CMI||Jan. 25|
|Invesco Solar ETF||TAN||Jan. 22|
|Magna International, Inc.||MGA||Jan. 22|
|M.D.C. Holdings, Inc.||MDC||Jan. 22|
|Zebra Technologies Corp.||ZBRA||Jan. 14|
|Chegg, Inc.||CHGG||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|
|Skyworks Solutions, Inc.||SWKS||Jan. 7|
|Financial Select Sector SPDR||XLF||Jan. 7|
|Synaptics, Inc.||SYNA||Jan. 4|
|Sunrun, Inc.||RUN||Dec. 23|
|ShockWave Medical, Inc.||SWAV||Dec. 23|
|JPMorgan Chase & Co.||JPM||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|
|Tenet Healthcare Corp.||THC||Dec. 16|
|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|
|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|
|Dillard’s, Inc.||DDS||Dec. 4|
|Spotify Technology S.A.||SPOT||Dec. 3|
|Valero Energy Corp.||VLO||Dec. 3|
|Analog Devices, Inc.||ADI||Dec. 2|
|Sonos, Inc.||SONO||Dec. 1|
|American Airlines Group, Inc.||AAL||Nov. 30|
|Zillow Group, Inc.||ZG||Nov. 23|
|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|
|RingCentral, Inc.||RNG||Nov. 13|
|Regions Financial Corp.||RF||Nov. 13|
|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|
|Keysight Technologies, Inc.||KEYS||Nov. 4|
|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|
|First Solar, Inc.||FSLR||Oct. 13|
|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|
|SailPoint 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|
|Deere & Co.||DE||Aug. 24|
|Johnson Controls International||JCI||Aug. 21|
|Canadian Solar, Inc.||CSIQ||Aug. 20|
|General Motors Co.||GM||Aug. 20|
|Builders FirstSource, Inc.||BLDR||Aug. 18|
|Enphase Energy, Inc.||ENPH||Aug. 13|
|Freeport McMoRan, Inc.||FCX||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|
|Consumer Discretionary Select Sector SPDR||XLY||July 13|
|SunPower Corp.||SPWR||July 13|
|Danaher Corp.||DHR||June 24|
|Fiverr International, Ltd.||FVRR||June 19|
|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|
|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.|
Stock Market News – Bull trend pauses: S&P 500, Nasdaq digest breaks to uncharted territory
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