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the-technical-indicator:-bull-trend-intact:-s&p-500,-nasdaq-rally-from-major-support
the-technical-indicator:-bull-trend-intact:-s&p-500,-nasdaq-rally-from-major-support

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The Technical Indicator: Bull trend intact: S&P 500, Nasdaq rally from major support

Technically speaking, the major U.S. benchmarks are back on offense, rising in the wake of an aggressive September downdraft.

Against this backdrop, the S&P 500 and Nasdaq Composite have narrowly maintained major support — S&P 3,328 and Nasdaq 10,840 — rising from key tests to preserve a bullish intermediate-term bias.

Before detailing the U.S. markets’ wider view, the S&P 500’s
US:SPX
 hourly chart highlights the past two weeks.

As illustrated, the S&P has narrowly maintained major support.

The specific area matches the early-2020 breakout point (3,328) and the 50-day moving average, currently 3,331.

The prevailing upturn punctuates a successful retest, preserving a bullish intermediate-term bias.

Meanwhile, the Dow Jones Industrial Average
US:DJIA
 has maintained its range bottom.

The index registered consecutive session lows last week within one point of support (27,447).

Slightly more broadly, the Dow has weathered a shaky test of its breakout point (27.580), an area better illustrated on the daily chart.

Against this backdrop, the Nasdaq Composite
US:COMP
 is digesting an 11% plunge from record highs. Two inflection points stand out:

  • The 50-day moving average, currently 10,970.

  • Major support matching the former breakout point (10,840).

Last week’s close (10,853) registered slightly atop support, and the index has reclaimed its 50-day moving average with this week’s strong start.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq is digesting its fastest-ever 10%+ pullback from record territory.

The September downturn has been underpinned by major support (10,840), detailed repeatedly.

Consider that the September closing low (10,847) — established last Tuesday — and last week’s close (10,853) registered nominally atop major support.

The shaky, but successful, retest preserves a bullish intermediate-term bias.

Looking elsewhere, the Dow Jones Industrial Average has survived an extended test of its breakout point (27,580).

Recall that the Dow is adjusting to three new components, and Apple’s recent stock split, events that have affected its technical levels on the margin.

Delving deeper, the 50-day moving average, currently 27,356, remains an inflection point. The 50-day effectively defined the May, June and late-July lows.

Meanwhile, the S&P 500 has pulled in as much as 7.7% from its record high.

Consider that last week’s closing low (3,331) — established last Tuesday — registered slightly atop next support (3,328). The index has maintained this area on a closing basis.

Separately, the S&P has briefly tagged its 50-day moving average, currently 3,331, for the first time since April.

The bigger picture

Collectively, the S&P 500 and Nasdaq Composite have survived key technical tests even amid an aggressive September downturn.

More directly, the S&P 500 has narrowly maintained major support (3,328) while the Nasdaq Composite has weathered an extended test of its breakout point (10,840). (See the Sept. 8 review.)

Last week’s closing lows — S&P 3,331 and Nasdaq 10,847, both established last Tuesday — registered nominally atop support to initiate a full-week test.

The prevailing rallies from support punctuate successful retests, preserving a bullish intermediate-term bias.

Moving to the small-caps, the iShares Russell 2000 ETF has rallied from an extended test of the 50-day moving average.

The upturn places its breakdown point (153.39) in play.

Monday’s session high (153.43) matched resistance, and a retest remains underway.

Similarly, the SPDR S&P MidCap 400 ETF has weathered an extended September test of the 50-day moving average.

So combined, the small- and mid-caps — as well as the S&P 500 and Nasdaq Composite — have at least tagged the 50-day moving average, if not hammered it. The Dow industrials have maintained a posture atop the 50-day.

Looking elsewhere, the SPDR Trust S&P 500 has rallied from its 50-day moving average, currently 332.64.

To reiterate, overhead inflection points match the former breakout point (338.35) and the 20-day moving average, currently 342.78. Follow-through atop these areas would signal waning selling pressure.

Monday’s close (338.46) matched resistance, and the SPY has followed through higher early Tuesday.

Placing a finer point on the S&P 500, the index has maintained major support (3,328).

To reiterate, last Tuesday’s session low (3,329.25) and Thursday’s low (3,329.27) effectively matched the inflection point.

The index briefly undercut support Friday before notching a weekly close (3,341) atop support.

Conversely, last week’s high (3,425) closely matches the 20-day moving average, currently 3,429. Follow-through atop this area would strengthen the near-term backdrop, potentially signaling an end to the consolidation phase.

More broadly, th S&P has narrowly maintained the 50-day moving average, currently 3,331, a level matching major support (3,328).

The index briefly tagged the 50-day moving average Friday — on an intraday basis — for the first time since April.

Both levels mark headline inflection points — detailed previously — and the successful retest preserves a bullish intermediate-term bias. Beyond technical levels, the markets’ response to the Federal Reserve’s mid-week policy statement may add color.

Also see: Charting a market downdraft, S&P 500 sells off to major support.

Tuesday’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 Materials Select Sector SPDR
US:XLB
 is acting well technically. (Yield = 2.1%.)

As illustrated, the group has rallied to challenge its record peak (66.33), established Sept. 2. A near-term target projects to the 69.00 area on follow-through.

Conversely, the prevailing upturn originates from trendline support and the breakout point (63.10).

Slightly more broadly, the ascending 50-day moving average previously defined the trend. The group’s intermediate-term bias remains bullish barring a violation.

Looking elsewhere, the VanEck Vectors Gold Miners ETF
US:GDX
 is showing signs of life ahead of the Federal Reserve’s policy statement.

Technically, the group has edged atop trendline resistance, rising from support matching the breakout point. The upturn opens the path to a potential retest of seven-year highs at the August peak.

Conversely, the trendline pivots to support. Delving slightly deeper, the 50-day moving average, currently 41.20, is followed by the September low (39.30).

More broadly, the group is well positioned on the five-year chart, asserting a bullish continuation pattern hinged to the massive early-2020 rally.

Moving to specific names, American Express Co.
US:AXP
 is a Dow 30 component coming to life. (Yield = 1.6%.)

As illustrated, the shares have reclaimed the 200-day moving average, rising from a tight September range. The upturn punctuates consecutive August tests of trendline support.

Tactically, the breakout point (104.80) closely matches the 200-day moving average (104.54) and is followed by the former range bottom (102.00). The rally attempt is intact barring a violation.

Initially profiled July 13, SunPower Corp.
US:SPWR
 has returned 81.6% and remains well positioned.

Late last month, the shares gapped to four-year highs, rising as the company spun off Maxeon Solar Technologies.

The subsequent pullback has been flat, fueled by decreased volume, placing the shares 13.6% under the September peak.

Tactically, the top of the gap (10.50) is followed by the post-breakout low (9.95). A sustained posture higher signals a firmly-bullish bias.

Finally, Agnico Eagle Mines, Ltd.
US:AEM
 is a large-cap Toronto-based gold miner.

Technically, the shares have reached nine-year highs, clearing well-defined resistance amid a volume spike. The upturn punctuates an orderly five-week range. A near-term target projects to the 92.00 area.

Conversely, the breakout point pivots to support (84.50) and is followed by a near-term floor matching the August gap (81.50). The prevailing uptrend is firmly intact barring a violation.

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

V.F. Corp.

VFC

Sept. 14

Crocs, Inc.

CROX

Sept. 14

Toyota Motor Co.

TM

Sept. 14

Five Below, Inc.

FIVE

Sept. 10

Dow Inc.

DOW

Sept. 10

Eastman Chemical Co.

EMN

Sept. 10

CrowdStrike Holdings, Inc.

CRWD

Sept. 9

Workhorse Group, Inc.

WKHS

Sept. 9

International Paper Co.

IP

Sept. 3

Anaplan, Inc.

PLAN

Sept. 2

Beyond Meat, Inc.

BYND

Sept. 1

Elastic N.V.

ESTC

Sept. 1

iShares U.S. Real Estate ETF

IYR

Sept. 1

Yum Brands, Inc.

YUM

Aug. 31

Medtronic

MDT

Aug. 28

Celanese Corp.

CE

Aug. 26

Hilton Worldwide Holdings, Inc.

HLT

Aug. 26

Norfolk Southern Corp.

NSC

Aug. 25

Westlake Chemical Corp.

WLK

Aug. 25

Deere & Co.

DE

Aug. 24

PulteGroup, Inc.

PHM

Aug. 24

Expedia Group, Inc.

EXPE

Aug. 24

Visa, Inc.

V

Aug. 21

Johnson Controls International

JCI

Aug. 21

DuPont de Nemours, Inc.

DD

Aug. 21

Adobe, Inc.

ADBE

Aug. 20

Canadian Solar, Inc.

CSIQ

Aug. 20

General Motors Co.

GM

Aug. 20

Starbucks Corp.

SBUX

Aug. 18

Emerson Electric Co.

EMR

Aug. 18

Builders FirstSource, Inc.

BLDR

Aug. 18

Steel Dynamics, Inc.

STLD

Aug. 17

Elanco Animal Health, Inc.

ELAN

Aug. 17

Eaton Corp.

ETN

Aug. 14

Brinker International, Inc.

EAT

Aug. 13

Enphase Energy, Inc.

ENPH

Aug. 13

Avis Budget Group, Inc.

CAR

Aug. 12

U.S. Global Jets ETF

JETS

Aug. 11

Nike, Inc.

NKE

Aug. 11

Nucor Corp.

NUE

Aug. 11

Financial Select Sector SPDR

XLF

Aug. 10

Freeport McMoRan, Inc.

FCX

Aug. 10

Natera, Inc.

NTRA

Aug. 10

Lennar Corp.

LEN

Aug. 7

McDonald’s Corp.

MCD

Aug. 7

Mastercard, Inc.

MA

Aug. 6

United Health Group, Inc.

UNH

Aug. 6

Kansas City Southern

KSU

Aug. 6

Industrial Select Sector SPDR

XLI

Aug. 6

Verizon Communications, Inc.

VZ

Aug. 5

Sunrun, Inc.

RUN

Aug. 5

Coeur Mining, Inc.

CDE

Aug. 5

Southern Copper Corp.

SCCO

Aug. 3

Agco Corp.

AGCO

July 31

Penn National Gaming, Inc.

PENN

July 30

Procter & Gamble Co.

PG

July 29

SPDR S&P Metals & Mining ETF

XME

July 28

iShares MSCI South Korea ETF

EWY

July 28

HCA Healthcare, Inc.

HCA

July 28

Toll Brothers, Inc.

TOL

July 27

HP, Inc.

HPQ

July 24

Advanced Micro Devices, Inc.

AMD

July 23

Best Buy Co., Inc.

BBY

July 22

iShares Europe ETF

IEV

July 21

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Monster Beverage Corp.

MNST

July 20

iShares U.S. Home Construction ETF

ITB

July 17

Progressive Corp.

PGR

July 17

Livongo Health, Inc.

LVGO

July 17

Roku, Inc.

ROKU

July 16

Catalent, Inc.

CTLT

July 16

Cognizant Technology Solutions, Inc.

CTSH

July 16

Health Care Select Sector SPDR

XLV

July 16

Consumer Staples Select Sector SPDR

XLP

July 15

Home Depot, Inc.

HD

July 15

Costco Wholesale Corp.

COST

July 15

Kirkland Lake Gold, Ltd.

KL

July 15

Air Products & Chemicals, Inc.

APD

July 14

Consumer Discretionary Select Sector SPDR

XLY

July 13

Alphabet, Inc.

GOOGL

July 13

Sony Corp.

SNE

July 13

SunPower Corp.

SPWR

July 13

D.R.Horton, Inc.

DHI

July 9

Taylor Morrison Home Corp.

TMHC

July 9

LGI Homes, Inc.

LGIH

July 8

Walmart, Inc.

WMT

July 8

J.B. Hunt Transport Services, Inc.

JBHT

July 8

Big Lots, Inc.

BIG

July 1

Tandem Diabetes Care, Inc.

TNDM

July 1

Dell Technologies, Inc.

DELL

June 30

Yeti Holdings, Inc.

YETI

June 25

Danaher Corp.

DHR

June 24

RH

RH

June 24

First Solar, Inc.

FSLR

June 22

Lowe’s Companies

LOW

June 19

Fiverr International, Ltd.

FVRR

June 19

Etsy, Inc.

ETSY

June 17

Williams-Sonoma, Inc.

WSM

June 9

HubSpot, Inc.

HUBS

June 8

Square, Inc.

SQ

June 8

United Parcel Service, Inc.

UPS

June 5

FedEx Corp.

FDX

June 3

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

SolarEdge Technologies, Inc.

SEDG

May 29

Synopsis, Inc.

SNPS

May 27

iShares Silver Trust

SLV

May 15

Agnico Eagle Mines, Ltd.

AEM

May 15

Agilent Technologies, Inc.

A

May 15

Halozyme Therapeutics, Inc.

HALO

May 15

Qualcomm, Inc.

QCOM

May 12

Kinross Gold Corp.

KGC

May 11

Salesforce.com, Inc.

CRM

May 8

Facebook, Inc.

FB

May 7

Spotify Technology S.A.

SPOT

May 5

Old Dominion Freight Line, Inc.

ODFL

Apr. 29

Dollar General Corp.

DG

Apr. 28

ServiceNow, Inc.

NOW

Apr. 27

Five9, Inc.

FIVN

Apr. 24

Chewy, Inc.

CHWY

Apr. 24

Tesla, Inc.

TSLA

Apr. 23

Shopify, Inc.

SHOP

Apr. 23

VanEck Vectors Semiconductor ETF

SMH

Apr. 17

Veeva Systems, Inc.

VEEV

Apr. 17

Okta, Inc.

OKTA

Apr. 16

Target Corp.

TGT

Apr. 16

Netflix, Inc.

NFLX

Apr. 14

VanEck Vectors Gold Miners ETF

GDX

Apr. 14

Invesco QQQ Trust

QQQ

Apr. 14

DocuSign, Inc.

DOCU

Apr. 3

Zscaler, Inc.

ZS

Apr. 3

Apple, Inc.

AAPL

Mar. 27

Nvidia Corp.

NVDA

Mar. 27

Amazon.com, Inc.

AMZN

Mar. 26

Zoom Video Communications, Inc.

ZM

Mar. 19

iShares MSCI Emerging Markets ETF

EEM

Mar. 19

Newmont Corp.

NEM

Jan. 13

SPDR Gold Shares ETF

GLD

Jan. 2

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.

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