Technically speaking, the U.S. benchmarks’ nearly straightline 2019 rally attempt has accelerated in recent sessions, fueled partly by the Federal Reserve’s dovish-leaning policy shift.
Against this backdrop, the S&P 500 has rallied within view of a headline technical test — the 200-day moving average, currently 2,742 — and the pending selling pressure near resistance, or lack thereof, will likely add color.
Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +0.26% hourly chart highlights the past two weeks.
As illustrated, the S&P has staged a bull-flag breakout, extending its rally attempt.
Tactically, the 2,710 area pivots to notable support, and is followed by a deeper floor matching the 2017 close (2,673).
Conversely, major resistance matches the May peak (2,742) and the 200-day moving average, currently 2,741.76.
Similarly, the Dow Jones Industrial Average has extended its rally attempt.
The prevailing upturn punctuates a successful retest of the 200-day moving average, currently 24,991. The Dow has registered four straight closes atop the trending indicator.
Against this backdrop, the Nasdaq Composite continues to take flight.
Here again, the index has broken from a flag-like pattern hinged to the 7,274 inflection point, also illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has launched from its breakout point, an area closely matching the 2017 peak (7,004). Recent strength confirms the Nasdaq’s intermediate-term uptrend.
Slightly more broadly, the prevailing upturn places the 200-day moving average, currently 7,454, within striking distance. As always, the 200-day is a widely-tracked longer-term trending indicator, and the pending retest should be a useful bull-bear gauge.
Looking elsewhere, the Dow Jones Industrial Average has extended its break from trendline resistance.
Moreover, this is the lone widely-tracked U.S. benchmark positioned atop its 200-day moving average, currently 24,991. The Dow is vying for a fifth straight close higher early Tuesday.
On further strength, an inflection point matches the June peak (25,402) and is followed by former gap resistance (25,550).
Similarly, the S&P 500 has extended a break atop its former trendline.
On further strength, major resistance (2,742) closely matches the 200-day moving average, currently 2,741.76.
The bigger picture
Collectively, the U.S. benchmarks’ bigger-picture backdrop continues to strengthen.
On a headline basis, the Dow Jones Industrial Average has sustained a break atop the 200-day moving average, observing this area as support. Meanwhile, the S&P 500 and Nasdaq Composite have extended recent trendline breakouts, rising within view of the 200-day moving average.
This is bullish price action, though the pending retests of the 200-day mark a potential “watch out.”
Moving to the small-caps, the iShares Russell 2000 ETF has extended its rally atop the breakdown point. The former range top (147.90) pivots to near-term support.
Conversely, additional overhead broadly spans from about 153.60 to 154.50.
Similarly, the SPDR S&P MidCap 400 has extended its rally attempt.
Tactically, a near-term floor (331.40) is followed by firmer trendline support (325.25).
Combined, the small- and mid-cap benchmarks — as well as the big three U.S. benchmarks — have sustained breaks atop the 50-day moving average amid still muted early-2019 selling pressure.
Looking elsewhere, the SPDR Trust S&P 500 SPY, +0.27% has also extended its break from the trendline.
Here again, the marquee 200-day moving average, currently 273.90, is increasingly within view.
Placing a finer point on the S&P 500, its backdrop also continues to strengthen.
The index has registered a bullish V-shaped reversal from the December low, a move punctuated by last week’s rally atop trendline resistance amid the Federal Reserve’s dovish-leaning policy shift.
Tactically, major support matches the 2017 close (2,673) and is followed by the slightly deeper trendline. The S&P 500’s rally attempt is firmly intact barring a violation.
Conversely, major resistance (2,742) matches the 200-day moving average, currently 2,741.76.
As always, it’s the response to resistance that’s worth tracking. The chances of eventual follow-through improve to the extent the S&P holds tightly to resistance. (See the recent tests of 2,581 and 2,710.)
Beyond technical levels, the widely-tracked U.S. benchmarks continue to make technical progress. Each index has recently confirmed its intermediate-term uptrend amid still conspicuously absent 2019 selling pressure.
The S&P 500’s pending retest of the 200-day moving average (2,742) will likely add color as to the primary trend.
See also: Charting a garden-variety pullback, S&P 500 asserts near-term range.
See also: S&P 500 reaches firmer technical ground, pulls in from major resistance.
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 Energy Select Sector SPDR XLE, -0.03% is acting well technically. (Yield = 3.5%.)
As illustrated, the group has recently signaled an intermediate-term trend shift, clearing trendline resistance and the 50-day moving average.
Separately, the 50-day moving average’s slope has flattened, also consistent with a trend shift.
More immediately, the group has followed through modestly to start February, edging atop the breakdown point (63.90). This area is followed by a deeper floor matching the former range bottom (61.80) and the group’s recovery attempt is intact barring a violation.
Moving to specific names, Alibaba Group Holding Ltd. BABA, +2.42% is a large-cap Hong Kong-based Internet name coming to life.
Late last month, the shares staged a strong-volume breakout, clearing trendline resistance after the company’s third-quarter results.
The rally places major resistance matching the 200-day moving average, currently 169.50, under siege. Selling pressure near the range top has thus far been flat, fueled by decreased volume, improving the chances of eventual follow-through.
More broadly, the chart illustrates a developing double bottom defined by the October and December lows.
Initially profiled Jan. 22, Advanced Micro Devices, Inc. AMD, -3.29% has returned 16.2% across about two weeks.
As illustrated, the shares have recently knifed to three-month highs, rising after the company’s fourth-quarter results.
Though near-term extended, the strong-volume spike is longer-term bullish, and the shares are attractive on a pullback. Tactically, near-term support (23.70) is followed by the firmer breakout point (21.90).
Akamai Technologies, Inc. AKAM, +1.55% is a large-cap cloud services provider.
Technically, the shares have knifed from a tight two-week range, clearing trendline resistance and the 50-day moving average.
Underlying the upturn, the relative strength index (not illustrated) has registered its best levels since July, improving the chances of follow-through.
Tactically, the trendline closely matches the breakout point, circa 66.00, and the recovery attempt is intact barring a violation.
Finally, Global Payments, Inc. GPN, +0.36% is a large-cap electronic payment services provider showing signs of life.
The shares initially spiked four weeks ago, clearing trendline resistance tracking the 50-day moving average. The subsequent flag-like pattern signals muted selling pressure, positioning the shares to build on the early-January spike.
Tactically, the 200-day moving average (114.30) roughly matches the range top (115.00). A near-term target projects to the 120 area on follow-through.
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 | Date Profiled |
| Baidu, Inc. | BIDU | Feb. 4 |
| Ebay, Inc. | EBAY | Feb. 4 |
| Visa, Inc. | V | Feb. 4 |
| Vulcan Materials Co. | VMC | Feb. 4 |
| Adobe, Inc. | ADBE | Feb. 1 |
| Baozun, Inc. | BZUN | Feb. 1 |
| Intercept Pharmaceuticals, Inc. | ICPT | Feb. 1 |
| Owens Corning | OC | Feb. 1 |
| ON Semiconductor Corp | ON | Jan. 31 |
| MKS Instruments, Inc. | MKSI | Jan. 31 |
| iRobot Corp. | IRBT | Jan. 31 |
| Salesforce.com, Inc. | CRM | Jan. 30 |
| KLA-Tencor Corp. | KLAC | Jan. 30 |
| Western Digital Corp. | WDC | Jan. 30 |
| Whirlpool Corp. | WHR | Jan. 30 |
| SPDR S&P Homebuilders ETF | XHB | Jan. 30 |
| Texas Instruments, Inc. | TXN | Jan. 29 |
| Keysight Technologies, Inc. | KEYS | Jan. 29 |
| Check Point Software Technologies | CHKP | Jan. 29 |
| Exact Sciences Corp. | EXAS | Jan. 28 |
| Schlumberger Limited | SLB | Jan. 28 |
| Aptiv plc | APTV | Jan. 28 |
| Teradyne, Inc. | TER | Jan. 28 |
| VanEck Vectors Semiconductor ETF | SMH | Jan. 25 |
| Applied Materials, Inc. | AMAT | Jan. 25 |
| Micron Technology, Inc. | MU | Jan. 25 |
| Roku, Inc. | ROKU | Jan. 25 |
| iShares MSCI Emerging Markets ETF | EEM | Jan. 24 |
| SBA Communications Corp. | SBAC | Jan. 24 |
| Eastman Chemical Co. | EMN | Jan. 24 |
| LGI Homes, Inc. | LGIH | Jan. 24 |
| Tableau Software, Inc. | DATA | Jan. 24 |
| Paycom Software, Inc. | PAYC | Jan. 23 |
| Delphi Technologies | DLPH | Jan. 23 |
| Bed Bath & Beyond, Inc. | BBBY | Jan. 23 |
| Eagle Materials, Inc. | EXP | Jan. 23 |
| Advanced Micro Devices, Inc. | AMD | Jan. 22 |
| Lennar Corp. | LEN | Jan. 22 |
| Materials Select Sector SPDR | XLB | Jan. 18 |
| Nike, Inc. | NKE | Jan. 18 |
| VeriSign, Inc. | VRSN | Jan. 18 |
| Dollar Tree, Inc. | DLTR | Jan. 18 |
| Apple, Inc. | AAPL | Jan. 18 |
| Amazon.com | AMZN | Jan. 17 |
| NetEase, Inc. | NTES | Jan. 17 |
| Nevro Corp. | NVRO | Jan. 17 |
| Westlake Chemical Corp. | WLK | Jan. 17 |
| Coupa Software, Inc. | COUP | Jan. 16 |
| Veeva Systems, Inc. | VEEV | Jan. 16 |
| Teledoc Health, Inc. | TDOC | Jan. 16 |
| Incyte Corp | INCY | Jan. 16 |
| Deere & Co. | DE | Jan. 11 |
| CyberArk Software | CYBR | Jan. 11 |
| Square, Inc. | SQ | Jan. 10 |
| Facebook, Inc. | FB | Jan. 9 |
| Okta, Inc. | OKTA | Jan. 9 |
| Tandem Diabetes Care, Inc. | TNDM | Jan. 9 |
| RingCentral, Inc | RNG | Jan. 8 |
| Alteryx, Inc. | AYX | Jan. 8 |
| Pioneer Natural Resources Co. | PXD | Jan. 8 |
| Netflix, Inc. | NFLX | Jan. 7 |
| iShares Brazil ETF | EWZ | Jan. 7 |
| Ciena Corp. | CIEN | Jan. 7 |
| Crox, Inc. | CROX | Jan. 7 |
| IAC/InterActivecorp | IAC | Jan. 7 |
| Five9, Inc. | FIVN | Dec. 13 |
| Ambarella, Inc. | AMBA | Dec. 11 |
| Tech Data Corp. | TECD | Dec. 11 |
| SPDR Gold Shares ETF | GLD | Dec. 10 |
| VanEck Vectors Gold Miners ETF | GDX | Dec. 10 |
| Workday, Inc. | WDAY | Dec. 10 |
| Atlassian Corp. | TEAM | Dec. 10 |
| Ventas, Inc. | VTR | Nov. 26 |
| Ubiquiti Networks, Inc. | UBNT | Nov. 13 |
| TripAdvisor, Inc. | TRIP | Nov. 13 |
| Welltower, Inc. | WELL | Nov. 12 |
| Xilinx, Inc. | XLNX | Nov. 12 |
| Fabrinet | FN | Nov. 12 |
| Acacia Communications, Inc. | ACIA | Nov. 7 |
| Starbucks Corp. | SBUX | Nov. 5 |
| American Tower Corp. | AMT | Nov. 5 |
| Coca-Cola Co. | KO | Oct. 31 |
| Utilities Select Sector SPDR | XLU | Oct. 25 |
| McDonald’s Corp. | MCD | Oct. 24 |
| Church & Dwight Co. | CHD | Oct. 22 |
| Spirit Airlines, Inc. | SAVE | Oct. 19 |
| Yum! Brands, Inc. | YUM | Oct. 18 |
| Eli Lilly & Co. | LLY | Oct. 17 |
| CME Group, Inc. | CME | Oct. 8 |
| Merck & Co., Inc. | MRK | June 21 |
| Twilio, Inc. | TWLO | May 21 |
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