By Michael Ashbaugh, MarketWatch
Placing a finer point on the S&P 500, its backdrop remains straightforward.
To start, recall that the mid-June peak (2,910.6) has registered slightly under next resistance (2,912), detailed previously.
The mid-month pullback from resistance has been orderly, underpinned by support (2,873) matching the 50-day moving average, currently 2,874.8. Bullish price action.
More immediately, Tuesday’s strong start places record territory within striking distance. The S&P’s record close (2,945.83) is closely followed by its absolute record peak (2,954.13).
Against this backdrop, Tuesday’s early breadth statistics have approached bullish extremes — NYSE advancing volume is declining volume by about a 6-to-1 margin — the earmarks of a healthy uptrend. Recall that the June rally originates from an unusually strong 8-to-1 up day. (Tuesday marks day 11 following that initial rally.)
Combine price action with the June internals and an eventual retest of record highs looks increasingly likely. The S&P’s pending response to resistance, combined with the response to the Federal Reserve’s mid-week policy statement, will likely add color.
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.
Charting FAANG-related price action — Large-cap technology begins repair process
Drilling down further, bellwether large-cap technology names have started the process of repairing recent technical damage. Recall that Facebook, Amazon and Alphabet plunged to start June, pressured amid concerns over pending U.S. regulatory oversight.
To start, Facebook, Inc. /zigman2/quotes/205064656/composite FB +3.03% has staged a steep June reversal, rising from a successful test of the 200-day moving average.
In the process, the shares have reclaimed the breakdown point (174.00), an area closely matching trendline resistance.
As detailed previously, the 50-day moving average, currently 182.50, has defined Facebook’s recent trend, and the prevailing rally attempt is intact barring a violation. (Also see the June 12 review.)
Similarly, Amazon.com, Inc. /zigman2/quotes/210331248/composite AMZN +1.17% has reversed sharply from the June low.
Here again, the shares have reclaimed the breakdown point (1,823.75), an area roughly matching former trendline resistance.
Separately, consider that the 50-day moving average (1,861) has marked a bull-bear inflection point going back as far as the January and February lows. Tactically, the 50-day is closely followed by gap support (1,818.00) and Amazon’s recovery attempt is intact barring a violation. (Also see the June 10 review.)
Meanwhile, Alphabet, Inc. /zigman2/quotes/202490156/composite GOOGL +0.09% continues to lag behind its counterparts.
Recall that the shares started June with a sharp gap lower, pressured amid a volume spike. The subsequent rally attempt has been fueled by decreased volume, and thus far capped by gap resistance (1,103.35), detailed previously.
Alphabet has ventured atop resistance early Tuesday, and a close higher would mark progress. On further strength, the 200-day moving average (1,130.70) is within striking distance.
To be sure, Alphabet is not exactly well positioned, based on today’s backdrop, though the process of repairing recent damage is underway.
Looking elsewhere, the SPDR Gold Shares ETF /zigman2/quotes/200593176/composite GLD +0.44% is digesting a decisive June breakout.
Fundamentally, recently easing interest rates have pressured the U.S. dollar modestly, presenting a gold tailwind. As always, gold and dollar are inversely correlated.
Technically, the shares have knifed atop trendline resistance, rising to challenge 14-month highs. Selling pressure near the range top has been muted, improving the chances of eventual follow-through.
Tactically, near-term support (124.90) closely matches the March peak, and a breakout attempt is in play barring a violation.
Moving to U.S. sectors, the Health Care Select Sector SPDR /zigman2/quotes/205918244/composite XLV -0.97% has come to life technically. (Yield = 1.5%.)
Earlier this month, the group knifed atop trendline resistance, reaching two-month highs amid increased volume.
The ensuing pullback has been flat, fueled by decreased volume, positioning the group to build on the initial breakout. Tactically, the 200-day moving average is followed by the trendline, circa 90.20, and the group’s recovery attempt is intact barring a violation.
Finally, there’s always something to worry about, and the transports’ prevailing backdrop highlights a concern.
Technically, the iShares Transportation Average ETF /zigman2/quotes/204736489/composite IYT -0.08% is developing a head-and-shoulders top, a bearish pattern defined by the February, April and June peaks.
As an economically-sensitive sector, the group’s sluggishness — even amid recently pronounced crude-oil price weakness — raises a question mark.
Tactically, notable resistance matches the June peak (187.06) — as well as the 50- and 200-day moving averages — and a close higher would strengthen the bull case.
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.
|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|
|JetBlue Airways Corp.||JBLU||June 13|
|Kirkland Lake Gold Ltd.||KL||June 13|
|CareDx, Inc.||CDNA||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|
|iShares U.S. Real Estate ETF||IYR||June 6|
|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|
|GW Pharmaceuticals||GWPH||May 10|
|Omnicom Group, Inc.||OMC||May 7|
|Take-Two Interactive Software, Inc.||TTWO||May 2|
|Jacobs Engineering Group, Inc.||JEC||May 2|
|Medidata Solutions, Inc.||MDSO||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|
|RingCentral, Inc||RNG||Jan. 8|
|Alteryx, Inc.||AYX||Jan. 8|
|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|