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Michael Ashbaugh

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Sept. 3, 2019, 12:35 p.m. EDT

Charting a (fourth) failed technical test, S&P 500 balks at 50-day average

Focus: Real estate sector sustains a breakout, Health care sector presses key trendline, IYR, XLV, AKAM, LRCX, NEM, JKS

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By Michael Ashbaugh, MarketWatch

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Looking elsewhere, the SPDR Trust S&P 500 /zigman2/quotes/209901640/composite SPY +0.51% remains  relatively resilient, positioned comfortably atop the 200-day moving average.

Conversely, the SPY briefly tagged its 50-day moving average to conclude August, currently 294.04, though the early-September downturn punctuates the latest failed retest.

Against this backdrop, the S&P 500’s well-defined August range seems to be extending to September. Familiar technical levels stand out.

To start, major resistance matches the range top (2,943) and the 50-day moving average, currently 2,944, detailed repeatedly.

Friday’s session high (2,940) registered nominally under resistance to conclude August, punctuating a failed retest. The aggressiveness of the very early September downturn should be a useful bull-bear gauge.

Within the range, the 2,898-to-2,912 area remains an inflection point, an area extending back to late-June and April. (Also see the hourly chart.)

Delving deeper, major support spans from 2,800 to 2,817, an area matching the 200-day moving average, currently 2,806.

Collectively, the S&P 500’s longer-term bias remains bullish barring a violation of the 2,800 support. A sustained posture atop the 2,898-to-2,912 area marks progress, though the intermediate-term bull case would more firmly strengthen with a break from the range top, circa 2,944.

Also see: Bull trend (tenuously) intact: S&P 500 rattles the August range.

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 iShares U.S. Real Estate ETF /zigman2/quotes/202389641/composite IYR +0.13%  is acting well, rising amid easing interest rates. (Yield = 2.8%.)

As illustrated, the group has sustained an August rally to 12-year highs, asserting a flag-like pattern underpinned by the breakout point (90.90).

Delving deeper, trendline support closely tracks the 100-day moving average, currently 88.75, and the group’s technical bias remains bullish barring a violation.

Meanwhile, the Health Care Select Sector SPDR /zigman2/quotes/205918244/composite XLV +1.13%  has reached a major technical test. (Yield = 1.7%.)

Specifically, the group is pressing trendline resistance, an area matching the former breakdown point, circa 90.60. The August close (90.60) matched resistance.

On further strength, the 50-day moving average, currently 91.57, closely matches the range top (91.70). An eventual close higher would mark a “higher high” more firmly signaling a trend shift.

Profiled Aug. 8, Akamai Technologies, Inc. /zigman2/quotes/203072268/composite AKAM +1.17%  remains well positioned.

The shares initially spiked four weeks ago, knifing to 19-year highs after the company’s quarterly results.

The subsequent orderly range is a continuation pattern — underpinned by the breakout point — positioning the shares to build on the initial strong-volume rally. Tactically, a near-term target projects to the 96 area on a break from the range top (90.20).

Lam Research Corp. /zigman2/quotes/208077897/composite LRCX +1.94%  is a large-cap chip equipment name coming to life. (Yield = 2.2%.)

As illustrated, the shares are rising from a bullish cup-and-handle pattern defined by the June and August lows.

Resistance spans from about 210.50 to 211.50, and a close higher would resolve the pattern. An intermediate-term target projects to the 228 area on follow-through.

Conversely, the 50-day moving average, currently 198.10, has marked an inflection point, and a posture higher supports a bullish bias.

Newmont Goldcorp Corp. /zigman2/quotes/205356474/composite NEM +2.65%  is a well positioned large-cap gold miner.

Late last month, the shares reached 16-month highs, clearing resistance matching the July peak.

The ensuing pullback places the shares at an attractive entry near the breakout point (39.90) and 3.4% under the August peak.

Slightly more broadly, the August breakout originates from the 50-day moving average, currently 38.70, and the prevailing uptrend is intact barring a violation.

Finally, JinkoSolar Holding Co., Inc. /zigman2/quotes/207601099/composite JKS +0.34%  is a small-cap China-based name setting up well for the near-term.

The shares concluded August with a strong-volume breakout, rising after the company’s second-quarter results.

Tactically, the breakout point (20.80) is followed by deeper trendline support, circa 19.50, and the prevailing recovery 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.

Company Symbol Date Profiled
Lowe’s Companies, Inc. LOW Aug. 29
M.D.C. Holdings, Inc. MDC Aug. 29
Cheetah Mobile, Inc. CMCM Aug. 29
PepsiCo, Inc. PEP Aug. 28
InterXion Holding N.V. INXN Aug. 28
Urban Outfitters, Inc. URBN Aug. 28
iShares U.S. Home Construction ETF ITB Aug. 27
CyrusOne, Inc. CONE Aug. 27
RingCentral, Inc. RNG Aug. 27
Arrowhead Pharmaceuticals, Inc. ARWR Aug. 27
Western Digital Corp. WDC Aug. 23
MobileIron, Inc. MOBL Aug. 23
VanEck Vectors Retail ETF RTH Aug. 22
Carvana Co. CVNA Aug. 22
Apple, Inc. AAPL Aug. 21
SPDR S&P Homebuilders ETF XHB Aug. 21
PagSeguro Digital Ltd. PAGS Aug. 21
Reliance Steel & Aluminum Co. RS Aug. 21
AMAG Pharmaceuticals, Inc. AMAG Aug. 21
KLA Corp. KLAC Aug. 20
XPO Logistics, Inc. XPO Aug. 20
Wendy’s Co. WEN Aug. 19
Itron, Inc. ITRI Aug. 19
Sonos, Inc. SONO Aug. 19
Allakos, Inc. ALLK Aug. 19
Cirrus Logic CRUS Aug. 14
Builders FirstSource, Inc. BLDR Aug. 14
Amgen, Inc. AMGN Aug. 14
Lattice Semiconductor Corp. LSCC Aug. 13
Kellogg Co. K Aug. 13
SBA Communications Corp. SBAC Aug. 12
Zimmer Biomet Holdings, Inc. ZBH Aug. 12
L3Harris Technologies, Inc. LHX Aug. 12
iShares U.S. Real Estate ETF IYR Aug. 9
Akamai Technologies, Inc. AKAM Aug. 8
D.R. Horton, Inc. DHI July 31
Teradyne, Inc. TER July 30
SSR Mining, Inc. SSRM July 30
United Parcel Service, Inc. UPS July 29
Abbott Laboratories ABT July 26
Humana, Inc. HUM July 22
DexCom, Inc. DXCM July 19
Agnico Eagle Mines Ltd. AEM July 18
Franco-Nevada Corp. FNV July 18
Pan American Silver Corp. PAAS July 17
Neurocrine Biosciences, Inc. NBIX July 17
LivePerson, Inc. LPSN July 16
Texas Instruments, Inc. TXN July 15
J.B. Hunt Transport Services, Inc. JBHT July 15
Owens Corning OC July 11
Twitter, Inc. TWTR July 10
Micron Technology, Inc. MU July 10
Inphi Corp. IPHI July 8
Shake Shack, Inc. SHAK June 28
FMC Corp. FMC June 27
SunPower Corp. SPWR June 26
Williams-Sonoma, Inc. WSM June 25
VanEck Vectors Gold Miners ETF GDX June 21
iShares Silver Trust SLV June 20
Home Depot, Inc. HD June 19
Lululemon Athletica, Inc. LULU June 19
SPDR Gold Shares ETF GLD June 18
Synopsys, Inc. SNPS June 17
Verisk Analytics, Inc. VRSK June 17
Medtronic plc MDT June 14
Ross Stores, Inc. ROST June 14
Kirkland Lake Gold Ltd. KL June 13
Dunkin Brands Group, Inc. DNKN June 12
Ciena Corp. CIEN June 11
Wix.com Ltd. WIX June 10
Ecolab, Inc. ECL June 10
Coca-Cola Co. KO June 6
Dollar General Corp. DG June 5
Repligen Corp. RGEN June 5
Avalara, Inc. AVLR May 23
Copa Holdings, S.A. CPA May 21
Atlassian Corp. TEAM May 16
SolarEdge Technologies, Inc. SEDG May 16
Roku, Inc. ROKU May 15
Johnson Controls International JCI May 10
Take-Two Interactive Software, Inc. TTWO May 2
Jacobs Engineering Group, Inc. JEC May 2
Church & Dwight Co., Inc. CHD Mar. 29
Consumer Staples Select Sector SPDR XLP Mar. 28
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
Costco Wholesale Corp. COST Mar. 6
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
Procter & Gamble Co. PG Feb. 8
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
Coupa Software, Inc. COUP Jan. 16
Veeva Systems, Inc. VEEV Jan. 16
Okta, Inc. OKTA Jan. 9
Alteryx, Inc. AYX Jan. 8
IAC/InterActivecorp IAC Jan. 7
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
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Michael Ashbaugh writes technical analysis for MarketWatch and is editor of MarketWatch's "The Technical Indicator" newsletter.

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