Stock Market News – Market divergence persists, Nasdaq whipsaws at 50-day average
U.S. stocks are mixed early Wednesday, vacillating after a mixed batch of economic data.
Against this backdrop, the major U.S. benchmarks remain in divergence mode, as the Nasdaq Composite continues to underperform amid relative strength elsewhere.
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 traversing a recently jagged near-term backdrop.
Tactically, Tuesday’s close (3,870.3) matched a familiar floor at the former breakout point (3,870).
Delving deeper, the 3,830 area is followed by the 50-day moving average, currently 3,819.
Meanwhile, the Dow Jones Industrial Average
has stabilized in the wake of last week’s 1,000-point whipsaw.
Recall the index has tried to break above its range (by 356 points) — and below its range (by 361 points) — ultimately concluding with a bull-bear stalemate.
Range-bound price action is bullish, against the current backdrop.
True to recent form, the Nasdaq Composite
remains the weakest major benchmark.
The index has whipsawed of late near the 50-day moving average, currently 13,342.
Separately, consider that the 13,600 area defines a six-session range top. Four of the prior six session highs have registered within seven points.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has pulled in to a lower plateau from last month’s record high.
The prevailing range bottom closely matches last-ditch support at the 2020 peak (12,973), detailed repeatedly.
The late-January low (12,985) and February low (13,003) registered slightly above major support, thus far preserving a bullish intermediate-term bias.
Looking elsewhere, the Dow Jones Industrial Average remains the strongest major benchmark.
The index registered a two-session, 1,000-point whipsaw to conclude February, and has since stabilized within the former range.
Meanwhile, the S&P 500 is off to a respectable March start.
Recall that its first-day-of-the-month rally marked the biggest single-day gain since June.
The S&P subsequently pulled in to close precisely on the former breakout point (3,870). Slightly more broadly, the prevailing upturn originates from the 50-day moving average.
The bigger picture
Collectively, the U.S. benchmarks’ bigger-picture backdrop remains bullish, though a familiar divergence remains in play.
Broadly speaking, the Nasdaq Composite has been pressured in recent sessions, though at least partly as a source of funds deployed to other sectors.
Put differently, the prevailing backdrop remains rotational, and support a bullish intermediate-term bias.
Moving to the small-caps, the iShares Russell 2000 ETF
is digesting the most decisive February breakout of the major U.S. benchmarks.
Its recent strong-volume downturn has been underpinned by the breakout point (216.70).
Similarly, the SPDR S&P MidCap 400 ETF
has asserted an orderly range near record highs.
Here again, the prevailing range has been underpinned by the breakout point. Bullish price action.
Looking elsewhere, the SPDR Trust S&P 500
has maintained its 50-day moving average amid comparably sluggish price action.
Recall that the 50-day has underpinned consecutive late-month downturns.
Placing a finer point on the S&P 500, the index is digesting an aggressive rally from the 50-day moving average.
Consider that Tuesday’s close (3,870.3) matched the former breakout point (3,870). An extended retest of this area remains underway early Wednesday.
More broadly, the prevailing upturn has registered within the context of a still grinding-higher uptrend.
To reiterate, consecutive monthly closes — January and February — have registered within two points of the 50-day moving average.
And both retests of the 50-day have been punctuated by respectable bullish reversals.
Against this backdrop, the S&P 500’s intermediate-term path of least resistance continues to point higher pending more aggressive signs of a bearish pulse.
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.
Initially profiled July 20, the Materials Select Sector SPDR
has returned 24.0% and remains well positioned. (Yield = 1.6%.)
Technically, the group has weathered a relatively modest late-February downturn, maintaining the 50-day moving average. (On a granular note, the late-January downturn was underpinned by support matching the December range bottom and has been punctuated by a “higher low” at the late-February low.)
The prevailing upturn positions the group for a potential retest of record highs.
Tactically, the 50-day moving average, currently 73.86, is followed by the former breakout point (72.40). A posture higher signals a firmly-bullish bias.
Moving to specific names, Alcoa Corp.
is a well positioned large-cap aluminum producer.
As illustrated, the share have registered a jagged breakout attempt, rising to tag a fractional 22-month high.
The prevailing upturn originates from support matching the December range bottom — and has been fueled by a sustained volume increase — laying the groundwork for potentially more decisive follow-through.
Tactically, the breakout point (25.10) is followed by the former range top (24.20). A sustained posture higher signals a bullish bias.
is a well positioned large-cap oil and gas name. (Yield = 1.5%.)
Late last month, the shares knifed to 52-week highs, clearing resistance matching the January peak.
The subsequent pullback places the shares near the breakout point (63.80) and 8.9% under the February peak.
Delving deeper, trendline support closely tracks the ascending 50-day moving average, currently 59.15. The prevailing uptrend is intact barring a violation.
is a mid-cap provider of broadband satellite and Internet services.
Technically, the shares have staged a strong-volume trendline breakout, knifing to three-month highs.
The upturn punctuates a mini double bottom — the “W” formation — defined by the late-January and February lows.
Tactically, the top of the gap (24.00) closely matches the trendline and is followed by the 100-day moving average. The prevailing recovery attempt is intact barring a violation.
Finally, Beazer Homes USA, Inc.
is a well positioned small-cap homebuilder.
The shares initially spiked six weeks ago, knifing to three-year highs amid increased volume.
The ensuing pullback has been underpinned by the breakout point, and more recently, the 50-day moving average. The 50-day has marked a 2021 support point, and a posture higher signals a bullish bias.
More broadly, the shares are well positioned on the three-year chart, rising from a continuation pattern underpinned by support matching the 2019 peak.
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|
|Mastercard, Inc.||MA||Mar. 2|
|Boeing Co.||BA||Mar. 2|
|Starbucks Corp.||SBUX||Mar. 1|
|MaxLinear, Inc.||MXL||Mar. 1|
|Oceaneering International, Inc.||OII||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|
|Canada Goose Holdings, Inc.||GOOS||Feb. 19|
|Texas Instruments, Inc.||TXN||Feb. 18|
|Zynga, Inc.||ZNGA||Feb. 18|
|Chevron Corp.||CVX||Feb. 18|
|Lyft, Inc.||LYFT||Feb. 16|
|Intel Corp.||INTC||Feb. 12|
|KLA Corp.||KLAC||Feb. 12|
|Pinterest, Inc.||PINS||Feb. 12|
|Helmerich & Payne, Inc.||HP||Feb. 11|
|U.S. Global Jets ETF||JETS||Feb. 9|
|Motorola Solutions, Inc.||MSI||Feb. 9|
|iShares U.S. Home Construction ETF||ITB||Feb. 8|
|Diamondback Energy, Inc.||FANG||Feb. 4|
|Wix.com, Ltd.||WIX||Feb. 3|
|CarMax, Inc.||KMX||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|
|Aptiv, plc||APTV||Jan. 29|
|Rio Tinto Group||RIO||Jan. 26|
|Netflix, Inc.||NFLX||Jan. 25|
|Cummins, Inc.||CMI||Jan. 25|
|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|
|Skyworks Solutions, Inc.||SWKS||Jan. 7|
|Financial Select Sector SPDR||XLF||Jan. 7|
|Synaptics, Inc.||SYNA||Jan. 4|
|JPMorgan Chase & Co.||JPM||Dec. 22|
|United Therapeutics Corp.||UTHR||Dec. 21|
|Shopify, Inc.||SHOP||Dec. 18|
|Calix, Inc.||CALX||Dec. 17|
|Tenet Healthcare Corp.||THC||Dec. 16|
|Williams-Sonoma, Inc.||WSM||Dec. 15|
|SDPR S&P Regional Banking ETF||KRE||Dec. 14|
|Etsy, Inc.||ETSY||Dec. 14|
|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|
|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|
|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|
|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|
|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|
|General Motors Co.||GM||Aug. 20|
|Builders FirstSource, Inc.||BLDR||Aug. 18|
|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|
|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|
|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|
|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|
|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 – Market divergence persists, Nasdaq whipsaws at 50-day average
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