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The Technical Indicator

Michael Ashbaugh

July 16, 2019, 12:44 p.m. EDT

Charting a break to ‘clear skies’ territory, S&P 500 sustains rally atop 3,000 mark

Focus: Industrial sector presses major resistance, Gold miners digest massive multi-year breakout, XLI, GDX, CYBR, ADI, XLNX, LPSN

By Michael Ashbaugh, MarketWatch

Editor’s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

Technically speaking, each big three U.S. benchmark has reached record territory, confirming its uptrend with a strong third-quarter start.

Against this backdrop, the S&P 500 is digesting its July breakout, a move opening the path to a longer-term target (3,150) precisely 5.0% above the 3,000 mark.

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

As illustrated, the S&P 500 has extended its July break to record territory.

Tactically, the breakout points pivot to support, an area broadly spanning from 2,995 to 3,003.

Meanwhile, the Dow Jones Industrial Average (DOW:DJIA)  has taken flight, placing distance atop the 27,000 mark.

Near-term inflection points match last week’s gap, at 27,135 and 27,088. Delving deeper, a firmer floor matches the breakout point (26,966).

Against this backdrop, the Nasdaq Composite (AMERICAN:COMP)  has also tagged another record high.

The prevailing upturn punctuates a successful test of the breakout point (8,172). Bullish price action.

More broadly, recall that last week’s low (8,061) closely matched gap support (8,059) an area also detailed below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended its July breakout, reaching uncharted territory. Significant support spans from 8,172 to 8,176, an area also detailed on the hourly chart.

Delving deeper, the prevailing breakout originates from a tight range, underpinned by the top of the July gap (8,059). The upturn resolves a bullish V-shaped reversal from the June low.

Looking elsewhere, the Dow Jones Industrial Average has truly taken flight.

The nearly straightline spike punctuates a successful test of its breakout point, an area matching the April peak (26,696).

On a more granular note, the Dow has staged a bullish two standard deviation breakout, notching consecutive closes atop its 20-day Bollinger bands. Though near-term extended, this statistically unusual event likely lays the groundwork for incremental intermediate-term gains.

Meanwhile, the S&P 500 has also extended its July breakout.

The prevailing upturn punctuates a successful test of the June peak (2,964) an area also detailed on the hourly chart.

The bigger picture

Collectively, each major U.S. benchmark has reached record territory, building on an already strong third-quarter start.

Moreover, each benchmark’s prevailing upturn punctuates a successful test of well-defined support — see the S&P 2,964, Nasdaq 8,060 and Dow 26,700 areas.

Put differently, the benchmarks are rising amid distinctly technical July price action, consistent with a firmly-grounded uptrend.

Moving to the small-caps, the iShares Russell 2000 ETF continues to lag behind.

Still, the small-cap benchmark has asserted a tight July range, digesting the early-July rally atop the major moving averages.

Similarly, the SPDR S&P MidCap 400 has established a tight July range, refusing to stay far from next resistance (354.70).

Tactically, the prevailing range top (359.25) is closely followed by the MDY’s year-to-date closing peak (261.02).

Looking elsewhere, the SPDR Trust S&P 500 has extended its July break to record territory.

In the process, the SPY has registered consecutive closes atop the 300 mark for the first time on record.

Against this backdrop, the S&P 500 has cleared the 3,000 mark, and is traversing previously uncharted territory.

As detailed previously, a longer-term S&P 500 target projects to the 3,150 area, precisely 5.0% above the 3,000 mark.

(Using closing levels, start with the April closing peak (2,945.8) and subtract the June low (2,744.5) = 201.3 points. Then, add the result to the breakout point: 2,945.8 + 201.3 = 3,147.)

Conversely, a notable floor matches the breakout point — the 2,952-to-2,964 area, detailed last week — and is followed by the familiar 2,912 support. The S&P 500’s intermediate-term bias remains bullish barring a violation.

See also: S&P 500 nails near-term target (2,995), sustains July break to record territory.

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 Industrial Select Sector SPDR is showing signs of life. (Yield = 2.0%.)

As illustrated, the group has established an orderly three-week range, rising to challenge nine-month highs.

Tactically, the 50-day moving average has marked a bull-bear inflection point — currently underpinning the July range — and the breakout attempt is intact barring a violation. A near-term target projects to the 80.50 area on follow-through.

Looking elsewhere, the VanEck Vectors Gold Miners ETF (PSE:GDX)  is acting well technically.

The group initially spiked three weeks ago, gapping to 33-month highs amid surging precious metals prices.

The subsequent orderly range — and more immediate tight one-week range — position the group to build on the massive June spike. Tactically, the range bottom matches the top of the gap (24.54) and a posture higher supports a bullish bias.

On a related note, the iShares Silver Trust has extended its trendline breakout, most recently detailed July 2.

Initially profiled Jan. 11, CyberArk Software Ltd. (NAS:CYBR)  has returned 80.1% and remains well positioned.

Technically, the shares have knifed to record highs, clearing well-defined resistance amid a volume spike. An intermediate-term target projects to the 150 area.

Conversely, the breakout point pivots to support, circa 135.50, and the prevailing uptrend is firmly intact barring a violation.

Analog Devices, Inc. (NAS:ADI)  is a well positioned large-cap semiconductor name. (Yield = 1.9%.)

As illustrated, the shares are challenging major resistance (117.60), rising from a flag-like pattern, the tight range pinned to the steep June rally.

The range top matches record highs, meaning that a breakout opens the path to uncharted territory and potentially material upside. A near-term target projects to the 123.50 area on follow-through.

Xilinx, Inc. (NAS:XLNX)  is a large-cap semiconductor name showing signs of life.

Specifically, the shares are rising from a bullish cup-and-handle pattern defined by the May and July lows.

Tactically, near-term support (114.20) is followed by the 50-day moving average (111.40) — a level that has defined the recent trend (see the April gap) — and the recovery attempt is intact barring a violation.

Finally, LivePerson, Inc. (NAS:LPSN)  is a mid-cap developer of e-commerce support software solutions.

Technically, the shares have knifed to record territory, rising from a four-month range bisected by the 50-day moving average.

Underlying the upturn, its relative strength index (not illustrated) has registered its best levels since early March, improving the chances of longer-term follow-through.

Though near-term extended, and due to consolidate, a pullback toward the breakout point (30.45) would offer an attractive entry.

Editor’s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

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
Texas Instruments, Inc. TXN July 15
Packaging Corp. of America PKG July 15
J.B. Hunt Transport Services, Inc. JBHT July 15
Delta Air Lines, Inc. DAL July 12
Coca-Cola Co. KO July 12
UnitedHealth Group, Inc. UNH July 12
Progressive Corp. PGR July 12
Zendesk, Inc. ZEN July 11
Owens Corning OC July 11
TJX Companies, Inc. TJX July 11
Sarepta Therapeutics, Inc. SRPT July 11
Twitter, Inc. TWTR July 10
Zix Corp. ZIXI July 10
Micron Technology, Inc. MU July 10
VanEck Vectors Semiconductor ETF SMH July 9
Keysight Technologies, Inc. KEYS July 9
Stratasys, Ltd. SSYS July 9
United Airlines Holdings, Inc. UAL July 9
iShares MSCI Japan ETF EWJ July 8
Inphi Corp. IPHI July 8
Zscaler, Inc. ZS July 8
Invesco QQQ Trust QQQ July 2
PNC Financial Services Group, Inc. PNC July 1
Teledoc Health, Inc. TDOC July 1
Cummins, Inc. CMI July 1
MSCI, Inc. MSCI July 1
Tesla, Inc TSLA June 28
Whirlpool Corp. WHR June 28
Shake Shack, Inc. SHAK June 28
Momo, Inc. MOMO June 28
Baozun, Inc. BZUN June 27
FMC Corp. FMC June 27
ArQule, Inc. ARQL June 27
Wendy’s Co. WEN June 26
SunPower Corp. SPWR June 26
Blueprint Medicines Corp. BPMC June 26
Oracle Corp. ORCL June 25
Williams-Sonoma, Inc. WSM June 25
Sunrun, Inc. RUN June 25
Adobe, Inc. ADBE June 24
Spotify Technology SPOT June 24
HollyFrontier Corp. HFC June 24
SPDR S&P Biotech ETF XBI June 24
Apple, Inc. AAPL June 21
VanEck Vectors Gold Miners ETF GDX June 21
iShares Silver Trust SLV June 20
VeriSign, Inc. VRSN June 20
Aecom ACM June 20
Home Depot, Inc. HD June 19
Lululemon Athletica, Inc. LULU June 19
Sinclair Broadcast Group, Inc. SBGI June 19
Amazon.com, Inc. AMZN June 18
Facebook, Inc. FB June 18
SPDR Gold Shares ETF GLD June 18
Synopsys, Inc. SNPS June 17
Zillow Group, Inc. ZG June 17
Verisk Analytics, Inc. VRSK June 17
Cisco Systems, Inc. CSCO June 14
Medtronic plc MDT June 14
Ross Stores, Inc. ROST June 14
Financial Select Sector SPDR XLF June 13
Kirkland Lake Gold Ltd. KL June 13
Grubhub, Inc. GRUB June 12
Dunkin Brands Group, Inc. DNKN June 12
Ciena Corp. CIEN June 11
Silicon Laboratories, Inc. SLAB June 11
Health Care Select Sector SPDR XLV June 10
Wix.com Ltd. WIX June 10
Ecolab, Inc. ECL June 10
Materials Select Sector SPDR XLB June 7
Brooks Automation, Inc. BRKS June 7
Catalent, Inc. CTLT June 7
Coca-Cola Co. KO June 6
Nasdaq, Inc. NDAQ June 6
Target Corp. TGT June 5
Dollar General Corp. DG June 5
Repligen Corp. RGEN June 5
Avalara, Inc. AVLR May 23
Progressive Corp. PGR May 22
Copa Holdings, S.A. CPA May 21
Open Text Corp. OTEX May 20
Quest Diagnostics, Inc. DGX May 20
Zscaler, Inc. ZS May 17
Aspen Technology, Inc. AZPN May 17
ServiceNow, Inc. NOW May 16
Atlassian Corp. TEAM May 16
SolarEdge Technologies, Inc. SEDG May 16
Roku, Inc. ROKU May 15
SAP SE SAP May 15
Arena Pharmaceuticals, Inc. ARNA May 15
CME Group, Inc. CME May 10
Johnson Controls International JCI May 10
Omnicom Group, Inc. OMC May 7
Take-Two Interactive Software, Inc. TTWO May 2
Jacobs Engineering Group, Inc. JEC May 2
JetBlue Airways Corp. JBLU Apr. 30
Honeywell International, Inc. HON Apr. 26
American Express Co. AXP Apr. 24
MetLife, Inc. MET Apr. 17
TE Connectivity, Ltd. TEL Apr. 4
CSX Corp. CSX Apr. 1
Church & Dwight Co., Inc. CHD Mar. 29
Consumer Staples Select Sector SPDR XLP Mar. 28
Travelers Companies, Inc. TRV Mar. 28
Pepsico, Inc. PEP Mar. 27
Shopify, Inc. SHOP Mar. 27
Kimberly-Clark Corp. KMB Mar. 15
iShares U.S. Real Estate ETF IYR Mar. 13
Air Products & Chemicals, Inc. APD Mar. 11
Hilton Worldwide Holdings, Inc. HLT Mar. 6
Costco Wholesale Corp. COST Mar. 6
Marvell Technology Group Ltd. MRVL Mar. 1
Universal Display Corp. OLED Mar. 1
Vulcan Materials Co. VMC Mar. 1
Walmart, Inc. WMT Feb. 22
Microsoft Corp. MSFT Feb. 22
Motorola Solutions, Inc. MSI Feb. 15
First Solar, Inc. FSLR Feb. 15
Mastercard, Inc. MA Feb. 11
Procter & Gamble Co. PG Feb. 8
Global Payments, Inc. GPN Feb. 5
Visa, Inc. V Feb. 4
SPDR S&P Homebuilders ETF XHB Jan. 30
Exact Sciences Corp. EXAS Jan. 28
Applied Materials, Inc. AMAT Jan. 25
SBA Communications Corp. SBAC Jan. 24
Paycom Software, Inc. PAYC Jan. 23
Advanced Micro Devices, Inc. AMD Jan. 22
VeriSign, Inc. VRSN Jan. 18
Coupa Software, Inc. COUP Jan. 16
Veeva Systems, Inc. VEEV Jan. 16
CyberArk Software CYBR Jan. 11
Okta, Inc. OKTA Jan. 9
Tandem Diabetes Care, Inc. TNDM Jan. 9
Alteryx, Inc. AYX Jan. 8
IAC/InterActivecorp IAC Jan. 7
Workday, Inc. WDAY Dec. 10
Starbucks Corp. SBUX Nov. 5
American Tower Corp. AMT Nov. 5
Utilities Select Sector SPDR XLU Oct. 25
McDonald’s Corp. MCD Oct. 24
Yum! Brands, Inc. YUM Oct. 18
Twilio, Inc. TWLO May 21
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