By Michael Ashbaugh, MarketWatch
Tactically, initial resistance (324.90) is followed by an inflection point matching the late-January peak (328.63). The pending retests from underneath should be a useful bull-bear gauge.
Placing a finer point on the S&P 500, the index asserted a bearish near-term bias last week.
As detailed previously, near-term inflection points match the former range bottom — the 3,280-to-3,283 area — and the 20- day moving average, currently 3,282.
More immediately, Tuesday’s session low (3,280) has matched the inflection point, and the S&P is vying to assert a posture higher. As always, it’s the session close that matters.
To reiterate, a swift reversal atop the 3,280 area would likely neutralize the January downdraft.
More broadly, the S&P 500 has weathered a key intermediate-term technical test.
Recall that important support rests at 3,215, a level matching the December gap (3,216), the January low (3,214.6) and the S&P’s former projected target (3,215).
Last week’s low (3,214.7) matched support, almost precisely, and the S&P has rallied sharply to start this week. Bullish price action, though rally attempt’s quality remains an open question.
When gauging the rally’s quality, two inflection points stand out. Initial resistance at 3,258 and the 3,280 area, detailed previously.
All told, the S&P 500’s intermediate-term bias remains bullish following a successful test of major support (3,215). More immediately, the S&P 3,280 area marks a key near-term technical test. A sustained break atop this area likely neutralizes the January downdraft.
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 Financial Select Sector SPDR /zigman2/quotes/209660484/composite XLF +2.18% seems to have weathered the recent market downdraft.
Tactically, a bull-bear inflection point closely matches the December gap (30.30) and the 50-day moving average, currently 30.50. Despite the recent whipsaw at support, downside follow-through has been absent.
Separately, the prevailing downturn punctuates a failed test of major resistance matching record territory — the 31.10 area — detailed previously. (The 2007 peak (30.97) and 2020 peak (31.10) have closely matched.)
The pending retest of this area from underneath should be a useful bull-bear gauge.
More broadly, the group remains well positioned on the three-year chart, rising from a massive head-and-shoulders bottom.
Meanwhile, the SPDR S&P Homebuilders ETF remains a pocket of relative strength.
The group started 2020 with a decisive breakout, knifing to record territory from a tight three-month base. The upturn marked a two standard deviation breakout, encompassing seven straight closes atop the 20-day Bollinger bands. (Bullish momentum registered as extreme and statistically unusual.)
By comparison, the prevailing downturn has been orderly, placing the group near the breakout point (46.40) and 3.6% under the January peak.
Initially profiled Sept. 18, Dow 30 component Intel Corp. /zigman2/quotes/203649727/composite INTC +1.68% has returned 24.0% and remains well positioned. (Yield = 2.0%.)
Late last month, the shares knifed to 19-year highs, rising after the company’s fourth-quarter results.
The ensuing pullback has narrowly filled the gap (by just four cents), placing the shares at an attractive entry 7.6% under the January peak. Delving deeper, trendline support closely matches the breakout point (60.80). A sustained posture higher supports a bullish bias.
More broadly, Intel is well positioned on the three-year chart, rising from a massive double bottom defined by the 2018 and 2019 lows.
STMicroelectronics, Inc. /zigman2/quotes/207734906/composite STM +0.18% is a well positioned large-cap Switzerland-based semiconductor name.
As illustrated, the shares have recently gapped to 17-year highs, rising amid a sustained volume spike after the company’s quarterly results.
The subsequent pullback has been fueled by decreased volume, placing the shares at an attractive entry near the breakout point (28.00) and 7.3% under the January peak.
PTC, Inc. /zigman2/quotes/202034776/composite PTC -0.84% is a well positioned large-cap software vendor.
Late last month, the shares gapped to six-month highs, rising after the company’s quarterly results.
The subsequent flag-like pattern positions the shares to build on the initial strong-volume spike. Tactically, the range bottom is closely followed by the breakout point (82.00). The prevailing rally attempt is firmly intact barring a violation.
Also notice the recent golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the longer-term trend.
The shares started 2020 with a nearly straightline strong-volume rally, rising after the company’s preliminary quarterly results.
By comparison, the ensuing pullback has been flat — underpinned by the designated support (3.58) — and punctuated by a strong-volume rally to 52-week highs. A near-term target projects to the 4.60 area on follow-through.
Note that the company’s quarterly results are due out Feb. 13.
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.
|Okta, Inc.||OKTA||Jan. 31|
|eHealth, Inc.||EHTH||Jan. 31|
|JetBlue Airways Corp.||JBLU||Jan. 31|
|PepsiCo, Inc.||PEP||Jan. 30|
|Abbott Laboratories||ABT||Jan. 30|
|United Therapeutics Corp.||UTHR||Jan. 30|
|Morgan Stanley||MS||Jan. 29|
|Halozyme Therapeutics, Inc.||HALO||Jan. 29|
|Akamai Technologies, Inc.||AKAM||Jan. 24|
|StoneCo Ltd.||STNE||Jan. 24|
|Spirit Airlines, Inc.||SAVE||Jan. 23|
|Himax Technologies, Inc.||HIMX||Jan. 23|
|International Business Machines||IBM||Jan. 22|
|Yeti Holdings, Inc.||YETI||Jan. 22|
|Home Depot, Inc.||HD||Jan. 21|
|IntercontinentalExchange, Inc.||ICE||Jan. 16|
|PulteGroup, Inc.||PHM||Jan. 16|
|Square, Inc.||SQ||Jan. 16|
|SailPoint Technologies Holdings, Inc.||SAIL||Jan. 15|
|Dunkin Brands Group, Inc.||DNKN||Jan. 15|
|SPDR S&P Homebuilders ETF||XHB||Jan. 14|
|Netflix, Inc.||NFLX||Jan. 14|
|Newmont Corp.||NEM||Jan. 13|
|SBA Communications Corp.||SBAC||Jan. 13|
|CME Group, Inc.||CME||Jan. 10|
|Motorola Solutions, Inc.||MSI||Jan. 10|
|fMcDonald’s Corp.||MCD||Jan. 9|
|Big Lots, Inc.||BIG||Jan. 9|
|Micron Technology, Inc.||MU||Jan. 8|
|Zendesk, Inc.||ZEN||Jan. 8|
|Fortinet, Inc.||FTNT||Jan. 7|
|Atlassian Corp.||TEAM||Jan. 7|
|Twilio, Inc.||TWLO||Jan. 7|
|Coupa Software, Inc.||COUP||Jan. 6|
|Progressive Corp.||PGR||Jan. 6|
|SPDR Gold Shares ETF||GLD||Jan. 2|
|Amazon.com, Inc.||AMZN||Jan. 2|
|Union Pacific Corp.||UNP||Dec. 23|
|Activision Blizzard, Inc.||ATVI||Dec. 20|
|Air Products and Chemicals, Inc.||APD||Dec. 18|
|PTC Therapeutics, Inc.||PTCT||Dec. 18|
|Autodesk, Inc.||ADSK||Dec. 17|
|American Express Co.||AXP||Dec. 16|
|Paycom Software, Inc.||PAYC||Dec. 16|
|NXP Semiconductors N.V.||NXPI||Dec. 11|
|Bristol-Myers Squibb Co.||BMY||Dec. 10|
|Splunk, Inc.||SPLK||Dec. 9|
|Macom Technology Solutions Holding, Inc.||MTSI||Dec. 6|
|Yamana Gold. Inc.||AUY||Dec. 5|
|VanEck Vectors Gold Miners ETF||GDX||Dec. 3|
|Pan American Silver Corp.||PAAS||Dec. 3|
|Nuance Communications, Inc.||NUAN||Dec. 3|
|Stanley Black & Decker, Inc.||SWK||Nov. 25|
|Baidu, Inc.||BIDU||Nov. 22|
|Medtronic plc||MDT||Nov. 21|
|Wheaton Precious Metals Corp.||WPM||Nov. 20|
|Nevro Corp.||NVRO||Nov. 19|
|Agios Pharmaceuticals, Inc.||AGIO||Nov. 18|
|Allstate Corp.||ALL||Nov. 14|
|Adobe, Inc.||ADBE||Nov. 14|
|AstraZenaca, plc||AZN||Nov. 12|
|Health Care Select Sector SPDR||XLV||Nov. 11|
|Advanced Micro Devices, Inc.||AMD||Nov. 7|
|Alibaba Holdings Group, Ltd.||BABA||Nov. 5|
|Alphabet, Inc.||GOOGL||Nov. 4|
|Teledoc Health, Inc.||TDOC||Nov. 1|
|Salesforce.com, Inc.||CRM||Oct. 31|
|Citrix Systems, Inc.||CTXS||Oct. 31|
|Industrial Select Sector SPDR||XLI||Oct. 31|
|Invesco QQQ Trust||QQQ||Oct. 30|
|Centene Corp.||CNC||Oct. 30|
|Generac Holdings, Inc.||GNRC||Oct. 25|
|RingCentral, Inc.||RNG||Oct. 24|
|United Technologies Corp.||UTX||Oct. 23|
|Nvidia Corp.||NVDA||Oct. 22|
|Tesla, Inc.||TSLA||Oct. 21|
|Garmin, Ltd.||GRMN||Oct. 18|
|Skyworks Solutions, Inc.||SWKS||Oct. 15|
|Taiwan Semiconductor Manufacturing Co.||TSM||Sept. 27|
|Sony Corp.||SNE||Sept. 26|
|Nike, Inc.||NKE||Sept. 26|
|Toll Brothers, Inc.||TOL||Sept.25|
|Intel Corp.||INTC||Sept. 18|
|VanEck Vectors Semiconductor ETF||SMH||Sept. 11|
|Kansas City Southern||KSU||Sept. 10|
|Lam Research Corp.||LRCX||Sept. 3|
|iShares U.S. Home Construction ETF||ITB||Aug. 27|
|Apple, Inc.||AAPL||Aug. 21|
|XPO Logistics, Inc.||XPO||Aug. 20|
|Itron, Inc.||ITRI||Aug. 19|
|D.R. Horton, Inc.||DHI||July 31|
|Teradyne, Inc.||TER||July 30|
|Franco-Nevada Corp.||FNV||July 18|
|Inphi Corp.||IPHI||July 8|
|Lululemon Athletica, Inc.||LULU||June 19|
|Ross Stores, Inc.||ROST||June 14|
|Consumer Staples Select Sector SPDR||XLP||Mar. 28|
|iShares U.S. Real Estate ETF||IYR||Mar. 13|
|Costco Wholesale Corp.||COST||Mar. 6|
|Microsoft Corp.||MSFT||Feb. 22|
|Procter & Gamble Co.||PG||Feb. 8|
|Applied Materials, Inc.||AMAT||Jan. 25|
|Utilities Select Sector SPDR||XLU||Oct. 25|