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Michael Ashbaugh

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Nov. 26, 2019, 12:41 p.m. EST

Charting a persistent late-year breakout, S&P 500 tags technical target (3,140)

Focus: Japan sustains trendline breakout, Health care sector knifes to record highs, EWJ, XLV, TGT, MKSI, TDOC

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By Michael Ashbaugh, MarketWatch

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Looking elsewhere, the SPDR Trust S&P 500 has extended a more persistent November breakout.

Recall that near-term inflection points match the mid-month gap, at 309.64 and 310.26. (See the Nov. 19 review.)

Last week’s closing low (310.27) registered just above the top of the gap (310.26) and has been punctuated by upside follow-through.

Placing a finer point on the S&P 500, its backdrop remains firmly bullish and relatively straightforward.

To start, the index has maintained its breakout point (3,100) punctuating a shallow, and apparently short-lived, late-month pullback. The successful test of first support is constructive.

More immediately, Tuesday’s early session high (3,139.3) has effectively matched the S&P’s intermediate-term target (3,140), detailed repeatedly. A slightly more distant target now projects to the 3,164 area.

Conversely, recall that major support matches the S&P 500’s breakout point, an area spanning from 3,022 to 3,028.

The ascending 50-day moving average, currently 3,023, matches major support. The S&P’s intermediate- to longer-term bias remains firmly bullish barring a violation.

Beyond technical levels, the late-year price action remains rotational, an added bull-market tailwind.

Also see: Bullish momentum persists, S&P 500 sustains break to uncharted 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 iShares MSCI Japan ETF /zigman2/quotes/201162210/composite EWJ -0.75%  is acting well technically. (Yield = 1.5%.)

Specifically, the shares have asserted an orderly November range, digesting a rally to 52-week highs.

The prevailing upturn originates from the early-September rally atop trendline resistance, an area closely matching the 50- and 200-day moving averages. Separately, the rally punctuates a decisive break atop a nearly two-year downtrend, detailed on the weekly chart.

More immediately, the tight November range signals still muted selling pressure, despite the steep rally, likely laying the groundwork for incremental follow-through. Tactically, the 50-day moving average is rising toward the range bottom (59.20) and a sustained posture higher supports a bullish bias.

Moving to U.S. sectors, the Health Care Select Sector SPDR /zigman2/quotes/205918244/composite XLV +0.08%  has taken flight, reaching all-time highs. (Yield = 1.5%.)

Technically, the group has staged a bull-flag breakout, knifing from the tight early-November range.

Against this backdrop, the prevailing upturn has registered as a two standard deviation breakout, encompassing two closes atop the 20-day Bollinger bands over the prior seven sessions.

As always, closes atop the Bollinger bands signal a tension between time horizons. Though near-term extended, the statistically unusual rally is longer-term bullish, and the group is attractive on a pullback. Tactically, near-term support (97.50) is followed by the firmer breakout point (95.70).

Moving to specific names, Target Corp. /zigman2/quotes/207799045/composite TGT -1.39%  is a large-cap retailer taking flight. (Yield = 2.1%.)

As illustrated, the shares have recently gapped sharply higher, knifing to record territory after the company’s third-quarter results.

Though still near-term overbought, the shares are attractive on a pullback. Tactically, the top of the gap (118.36) is followed by the deeper breakout point, circa 114.00.

Slightly more broadly, consider that the November gap marks Target’s second straight earnings-fueled spike.

Initially profiled Nov. 1, Teladoc Health, Inc. /zigman2/quotes/207420252/composite TDOC -0.22%  has added 7.1% and remains well positioned.

Late last month, the shares knifed to 52-week highs, rising after the company’s strong quarterly results.

The subsequent flag has been punctuated by this week’s follow-through amid increased volume. Tactically, a near-term floor (81.00) is followed by the range bottom (77.50) and a sustained posture higher supports a bullish bias.

Finally, MKS Instruments, Inc. /zigman2/quotes/208573663/composite MKSI -2.34%  is a large-cap developer of process control solutions.

Technically, the shares have recently knifed to 17-month highs, gapping sharply higher after the company’s third-quarter results.

The ensuing pullback places the shares at an attractive entry near the top of the gap (102.10) and 8.2% under the October peak. Delving slightly deeper, the 50-day moving average, currently 100.70, has marked an inflection point, and the prevailing rally attempt is firmly 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
UnitedHealth Group, Inc. UNH Nov. 25
LogMeIn, Inc. LOGM Nov. 25
Stanley Black & Decker, Inc. SWK Nov. 25
Workday, Inc. WDAY Nov. 25
Baidu, Inc. BIDU Nov. 22
International Game Technology IGT Nov. 22
Westlake Chemical Corp. WLK Nov. 22
Bank of America Corp. BAC Nov. 21
CyberArk Software Ltd. CYBR Nov. 21
Atlassian Corp. TEAM Nov. 21
Medtronic plc MDT Nov. 21
Wheaton Precious Metals Corp. WPM Nov. 20
Okta, Inc. OKTA Nov. 20
Veeco Instruments, Inc. VECO Nov. 20
Carvana Co. CVNA Nov. 20
Nevro Corp. NVRO Nov. 19
Avalara, Inc. AVLR Nov. 19
Kroger Co. KR Nov. 19
Honeywell International, Inc. HON Nov. 18
PVH Corp. PVH Nov. 18
Veeva Systems, Inc. VEEV Nov. 18
Agios Pharmaceuticals, Inc. AGIO Nov. 18
Xerox Holding Corp. XRX Nov. 15
NetApp, Inc. NTAP Nov. 15
Aptiv, plc APTV Nov. 15
Materials Select Sector SPDR XLB Nov. 14
Allstate Corp. ALL Nov. 14
Adobe, Inc. ADBE Nov. 14
Amkor Technology, Inc. AMKR Nov. 14
Cimarex Energy Co. XEC Nov. 14
Walt Disney Co. DIS Nov. 13
Zebra Technologies Corp. ZBRA Nov. 13
Steel Dynamics, Inc. STLD Nov. 13
Broadcom, Inc. AVGO Nov. 12
AstraZenaca, plc AZN Nov. 12
Health Care Select Sector SPDR XLV Nov. 11
United Parcel Service, Inc. UPS Nov. 11
Nucor Corp. NUE Nov. 11
Arrowhead Pharmaceuticals, Inc. ARWR Nov. 11
Advanced Micro Devices, Inc. AMD Nov. 7
NetScout Systems, Inc. NTCT Nov. 7
AudioCodes, Ltd. AUDC Nov. 7
iShares Transportation Average ETF IYT Nov. 6
Caterpillar, Inc. CAT Nov. 6
SPDR S&P Regional Banking ETF KRE Nov. 5
Alibaba Holdings Group, Ltd. BABA Nov. 5
U.S. Steel Corp. X Nov. 5
Alphabet, Inc. GOOGL Nov. 4
InterDigital, Inc. IDCC Nov. 4
Check Point Software Technologies, Inc. CHKP Nov. 4
Northern Trust Corp. NTRS Nov. 4
Teledoc Health, Inc. TDOC Nov. 1
Brooks Automation, Inc BRKS Nov. 1
Salesforce.com, Inc. CRM Oct. 31
Qualcomm, Inc. QCOM 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
KeyCorp KEY Oct. 30
Financial Select Sector SPDR XLF Oct. 29
Microsoft Corp. MSFT Oct. 29
Citigroup, Inc. C Oct. 28
Hilton Worldwide Holdings, Inc. HLT Oct. 28
SPDR S&P Retail ETF XRT Oct. 28
Generac Holdings, Inc. GNRC Oct. 25
Hewlett Packard Enterprise Co. HPE Oct. 24
RingCentral, Inc. RNG Oct. 24
United Technologies Corp. UTX Oct. 23
Union Pacific Corp. UNP Oct. 23
iShares MSCI South Korea ETF EWY Oct. 22
Nvidia Corp. NVDA Oct. 22
Tower Semiconductor Ltd. TSEM Oct. 21
PNC Financial Services Group, Inc. PNC Oct. 21
Tesla, Inc. TSLA Oct. 21
iShares MSCI United Kingdom ETF EWU Oct. 18
Garmin, Ltd. GRMN Oct. 18
Fastenal Co. FAST Oct. 17
Knight-Swift Transportation Holdings KNX Oct. 17
Facebook, Inc. FB Oct. 16
Celanese Corp. CE Oct. 16
Qorvo, Inc. QRVO Oct. 16
Skyworks Solutions, Inc. SWKS Oct. 15
Jabil Inc. JBL Oct. 15
Deere & Co. DE Oct. 14
VMWare, Inc. VMW Oct. 14
Crocs, Inc. CROX Oct. 9
TJX Companies, Inc. TJX Oct. 8
PriceSmart, Inc. PSMT Oct. 8
Comtech Telecommunications Corp. CMTL Oct. 4
Seattle Genetics, Inc. SGEN Oct. 1
Emerson Electric Co. EMR Sept. 30
PPG Industries, Inc. PPG Sept. 30
Taiwan Semiconductor Manufacturing Co. TSM Sept. 27
RH RH Sept. 27
CDW Corp. CDW Sept. 27
Sony Corp. SNE Sept. 26
Nike, Inc. NKE Sept. 26
Toll Brothers, Inc. TOL Sept.25
Synaptics, Inc. SYNA Sept.25
Group 1 Automotive, Inc. GPI Sept.25
Intel Corp. INTC Sept. 18
Keysight Technologies, Inc. KEYS Sept. 18
Packaging Corp. of America PKG Sept. 18
JPMorgan Chase & Co. JPM Sept. 16
Guidewire Software, Inc. GWRE Sept. 16
iShares Japan ETF EWJ Sept. 13
VanEck Vectors Semiconductor ETF SMH Sept. 11
Kansas City Southern KSU Sept. 10
CVS Corp. CVS Sept. 5
Lam Research Corp. LRCX Sept. 3
iShares U.S. Home Construction ETF ITB Aug. 27
Apple, Inc. AAPL Aug. 21
SPDR S&P Homebuilders ETF XHB Aug. 21
Reliance Steel & Aluminum Co. RS Aug. 21
XPO Logistics, Inc. XPO Aug. 20
Itron, Inc. ITRI Aug. 19
Cirrus Logic CRUS Aug. 16
Builders FirstSource, Inc. BLDR Aug. 16
D.R. Horton, Inc. DHI July 31
Teradyne, Inc. TER July 30
Franco-Nevada Corp. FNV July 18
J.B. Hunt Transport Services, Inc. JBHT July 15
Owens Corning OC July 11
Inphi Corp. IPHI July 8
Lululemon Athletica, Inc. LULU June 19
Ross Stores, Inc. ROST June 14
Dollar General Corp. DG June 5
Consumer Staples Select Sector SPDR XLP Mar. 28
iShares U.S. Real Estate ETF IYR Mar. 13
Costco Wholesale Corp. COST Mar. 6
Walmart, Inc. WMT Feb. 22
Microsoft Corp. MSFT Feb. 22
Procter & Gamble Co. PG Feb. 8
Applied Materials, Inc. AMAT Jan. 25
Utilities Select Sector SPDR XLU Oct. 25
/zigman2/quotes/201162210/composite
US : U.S.: NYSE Arca
$ 58.45
-0.44 -0.75%
Volume: 11.65M
Feb. 14, 2020 8:00p
loading...
/zigman2/quotes/205918244/composite
US : U.S.: NYSE Arca
$ 103.93
+0.08 +0.08%
Volume: 5.11M
Feb. 14, 2020 8:00p
loading...
/zigman2/quotes/207799045/composite
US : U.S.: NYSE
$ 116.63
-1.65 -1.39%
Volume: 3.29M
Feb. 14, 2020 6:30p
P/E Ratio
18.63
Dividend Yield
2.26%
Market Cap
$59.10 billion
Rev. per Employee
$209,322
loading...
/zigman2/quotes/207420252/composite
US : U.S.: NYSE
$ 111.77
-0.25 -0.22%
Volume: 1.09M
Feb. 14, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.13 billion
Rev. per Employee
$208,953
loading...
/zigman2/quotes/208573663/composite
US : U.S.: Nasdaq
$ 118.01
-2.83 -2.34%
Volume: 328,028
Feb. 14, 2020 4:00p
P/E Ratio
46.44
Dividend Yield
0.68%
Market Cap
$6.43 billion
Rev. per Employee
$427,769
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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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