By Michael Ashbaugh, MarketWatch
Looking elsewhere, the SPDR Trust S&P 500 is challenging record highs.
Consider that tandem rallies to the range top have been fueled by increased volume, while the intervening late-June pullback registered as shallow, fueled by decreased volume.
This is bullish price action, improving the chances of more decisive follow-through.
Against this backdrop, the S&P 500 is also acting well technically.
To start, the June rally was directionally sharp, and punctuated by shallow pullbacks, underpinned by well-defined support — the 2,873 and 2,912 areas. This marked the S&P’s strongest June rally since 1955.
More immediately, the strong July start places the S&P in uncharted territory, capped by no true resistance, opening the path to potentially material follow-through.
Tactically, a near-term target projects from the late-June low to the 2,995 area.
Beyond specific levels, the S&P 500’s intermediate-term path of least resistance points higher to start the third quarter pending signs of a bearish pulse.
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.
U.S. sub-sector backdrop strengthens (slightly) amid trade-fueled market rally
Drilling down further, the U.S. sub-sector backdrop remains uneven, though it continues to strengthen. Quickly consider the traditional sector leaders: The technology sector, financials and transports.
To start, the Invesco QQQ Trust /zigman2/quotes/208575548/composite QQQ +0.96% — a large-cap technology sector proxy — has rallied within striking distance of its record high (191.32) a level matching the April and May peaks.
The prevailing upturn builds on the steep June rally, and comparably flat late-month pullback, laying the groundwork for a potential breakout. A near-term target projects to the 195 area on follow-through.
Meanwhile, the Financial Select Sector SPDR /zigman2/quotes/209660484/composite XLF +0.74% has also come to life, rising to challenge eight-month highs.
The prevailing upturn comes from a tight June range and has been fueled by increased volume. Tactically, next resistance matches the May peak (28.14) and the pending retest from underneath should be a useful bull-bear gauge.
Conversely, well-defined support (27.50) closely matches the former range top. The group’s breakout attempt is intact barring a violation.
Looking elsewhere, the iShares Transportation Average ETF remains the weakest of the trio.
Still, the transports are off to a constructive July start.
As illustrated, the group has reached six-week highs, clearing the 50- and 200-day moving averages. The breakout neutralizes the transports’ developing head-and-shoulders top, a pattern formerly defined by the February, April and June peaks.
Tactically, the breakout point pivots to support — the 186-to-187 area — and the group’s recovery attempt is intact barring a violation.
Beyond U.S. sectors, the United States Oil Fund /zigman2/quotes/203483736/composite USO +2.10% has reached a major technical test to start the third quarter. The fund tracks the price of West Texas Intermediate (WTI) light, sweet crude oil.
Three technical levels, detailed last week, remain in play:
The 50-day moving average, currently 12.22.
The 200-day moving average, currently 12.35.
The bottom of the May gap at 12.37.
Against this backdrop, Monday’s session close (12.28) effectively matched resistance, and an extended retest remains underway.
Tactically, the USO’s technical bias remains bearish based on today’s backdrop, though the prevailing retest, amid a holiday-shortened week for the U.S., will likely add color.
Finally, the iShares Silver Trust /zigman2/quotes/205744453/composite SLV +1.29% is acting well technically.
As illustrated, the shares staged a decisive June trendline breakout, reaching three-month highs amid a sustained volume increase.
The subsequent pullback has filled the gap, placing the shares at an attractive entry 2.5% under the June peak. (Monday’s session low (14.17) precisely matched the bottom of the gap.)
Delving deeper, the 200-day moving average (14.04) has marked a recent inflection point. Silver’s rally attempt is intact barring a violation.
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.
|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|
|Adient plc||ADNT||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|
|U.S. Steel Corp.||X||June 20|
|Home Depot, Inc.||HD||June 19|
|Lululemon Athletica, Inc.||LULU||June 19|
|Sinclair Broadcast Group, Inc.||SBGI||June 19|
|Omnicell, Inc.||OMCL||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|
|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|
|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|