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Michael Ashbaugh

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Oct. 20, 2020, 12:35 p.m. EDT

Charting a successful technical test, S&P 500 nails the breakout point

Focus: Semiconductor sector maintains the breakout point, SMH, MU, FCX, CHGG, GOGO

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By Michael Ashbaugh, MarketWatch

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Slightly more broadly, the small- and mid-caps have asserted tandem bull flags, digesting breaks to less-charted territory. Constructive price action.

Looking elsewhere, the SPDR Trust S&P 500 /zigman2/quotes/209901640/composite SPY -2.44%  is digesting a rally to one-month highs.

The mid-October peak marked the SPY’s third-best close on record, and has been punctuated by a comparably flat downturn.

On a granular note, consider that last week’s rallies (Monday and Friday) registered amid increased volume, and have been punctuated by lighter-volume pullbacks. Constructive price action.

Placing a finer point on the S&P 500, the index has nailed its first notable support.

To reiterate, Monday’s close (3,427) matched the breakout point (3,428) to punctuate a successful initial retest.

Separately, recall that the mid-month gap (3,482) marks notable overhead, a level closely matching consecutive session closes, including the weekly close (3,483).

More broadly, the S&P 500’s mid-month pullback remains flattish to punctuate an initially sharp two standard deviation breakout, encompassing a single close atop the 20-day Bollinger bands.

The “expected” consolidation phase, or cooling-off period, remains underway.

As detailed repeatedly, the S&P’s first significant support (3,428) is followed by the 50-day moving average, currently 3,403, and the former breakout point (3,393).

Delving deeper, likely last-ditch support (3,328) matches the late-September gap, an area from which the steep October rally originates. The S&P 500’s intermediate-term bias remains bullish barring a violation.

Also see: Bull trend strengthens: S&P 500, Nasdaq clear 20-day volatility bands.

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 VanEck Vectors Semiconductor ETF /zigman2/quotes/200571902/composite SMH -4.88%  is acting well technically.

Earlier this month, the group reached record territory, clearing resistance matching the September peak.

The subsequent pullback has been comparably flat, placing the group near the breakout point (184.60) and 2.9% under the October peak.

Delving deeper, the former range top (174.75) closely matches the 50-day moving average, currently 174.90. A sustained posture higher signals a comfortably bullish bias.

Moving to specific names, Micron Technology, Inc. /zigman2/quotes/205710729/composite MU -5.56%  is a well positioned large-cap semiconductor name.

Technically, the shares have rallied to the range top, rising to challenge four-month highs. The chart illustrates a head-and-shoulders bottom defined by the late-June, August and October lows.

More immediately, the prevailing upturn punctuates a tight one-week range — amid tandem volume spikes — laying the groundwork for a potential breakout.

Tactically, a near-term floor closely matches gap support, circa 50.80, and is followed by the 200-day moving average, currently 49.15. A breakout attempt is in play barring a violation.

Initially profiled Aug. 10, Freeport-McMoRan, Inc. /zigman2/quotes/200215692/composite FCX -4.52%  has returned 19.2% and remains well positioned.

Earlier this month, the shares rallied to the range top, rising to challenge two-year highs on increased volume. The subsequent tight range has formed amid decreased volume, signaling muted selling pressure near resistance.

Tactically, a near-term target projects to the 19.50 area on follow-through. Conversely, trendline support closely tracks the ascending 50-day moving average, currently 15.75. A sustained posture higher signals a bullish bias.

Note that the company’s quarterly results are due out Thursday, Oct. 22.

Chegg, Inc. /zigman2/quotes/205655041/composite CHGG -6.90%  is a large-cap provider of online education solutions.

As illustrated, the shares have rallied to press record highs, territory matching the August peak.

Underlying the upturn, Chegg’s relative strength index (not illustrated) has recently notched its best levels since May, improving the chances of eventual follow-through.

Tactically, a near-term floor (81.90) closely matches the former range top and last week’s low. A breakout attempt is in play barring a violation.

Finally, Gogo, Inc. /zigman2/quotes/204349622/composite GOGO -5.89%  is a small-cap provider of in-flight connectivity and wireless entertainment services.

The shares initially spiked seven weeks ago, rising after the company announced the sale of its commercial aviation business unit.

The subsequent range is a bullish continuation pattern, positioning the shares to build on the initial strong-volume spike. Tactically, the 20-day moving average, currently 9.95, has underpinned the recent range. The prevailing breakout 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* (Click symbol for chart.) Date Profiled
Atlassian Corp. TEAM Oct. 19
Vulcan Materials Co. VMC Oct. 19
iRobot Corp. IRBT Oct. 19
Utilities Select Sector SPDR XLU Oct. 19
Northern Trust Co. NTRS Oct. 16
XPO Logistics, Inc. XPO Oct. 16
ON Semiconductor Corp. ON Oct. 16
Ford Motor Co. F Oct. 15
Texas Instruments, Inc. TXN Oct. 15
Skyworks Solutions, Inc. SWKS Oct. 14
International Business Machines Corp. IBM Oct. 14
CRISPR Therapeutics A.G. CRSP Oct. 14
Amazon.com, Inc. AMZN Oct. 13
First Solar, Inc. FSLR Oct. 13
Nevro Corp. NVRO Oct. 12
Teradyne, Inc. TER Oct. 12
SPDR S&P Homebuilders ETF XHB Oct. 9
Broadcom, Inc. AVGO Oct. 9
STMicroelectronics N.V. STM Oct. 9
Shake Shack, Inc. SHAK Oct. 9
SPDR S&P Biotech ETF XBI Oct. 8
Alexion Pharmaceuticals, Inc. ALXN Oct. 8
Twilio, Inc. TWLO Oct. 8
Cloudflare, Inc. NET Oct. 7
Ceridian HCM Holding, Inc. CDAY Oct. 7
Guess, Inc. GES Oct. 7
Gap, Inc. GPS Oct. 6
Motorola Solutions, Inc. MSI Oct. 6
Sunnova Energy International, Inc. NOVA Oct. 6
SBA Communications Corp. SBAC Oct. 5
Marvell Technology Group,Ltd. MRVL Oct. 5
Qorvo, Inc. QRVO Oct. 2
NCR Corp. NCR Oct. 2
LGI Homes, Inc. LGIH Oct. 2
SailPoint Technology Holdings, Inc. SAIL Oct. 1
Martin Marietta Materials, Inc. MLM Sept. 30
Whirlpool Corp. WHR Sept. 29
Abercrombie & Fitch Co. ANF Sept. 29
American Eagle Outfitters AEO Sept. 28
Twitter, Inc. TWTR Sept. 28
Blueprint Medicines Co. BPMC Sept. 28
Zendesk, Inc. ZEN Sept. 23
Datadog, Inc. DDOG Sept. 23
Scientific Games Corp. SGMS Sept. 23
Maxar Technologies, Inc. MAXR Sept. 18
V.F. Corp. VFC Sept. 14
Crocs, Inc. CROX Sept. 14
Five Below, Inc. FIVE Sept. 10
Dow Inc. DOW Sept. 10
Eastman Chemical Co. EMN Sept. 10
CrowdStrike Holdings, Inc. CRWD Sept. 9
Workhorse Group, Inc. WKHS Sept. 9
International Paper Co. IP Sept. 3
Anaplan, Inc. PLAN Sept. 2
Beyond Meat, Inc. BYND Sept. 1
Elastic N.V. ESTC Sept. 1
Medtronic MDT Aug. 28
Celanese Corp. CE Aug. 26
Norfolk Southern Corp. NSC Aug. 25
Westlake Chemical Corp. WLK Aug. 25
Deere & Co. DE Aug. 24
PulteGroup, Inc. PHM Aug. 24
Expedia Group, Inc. EXPE Aug. 24
Johnson Controls International JCI Aug. 21
Adobe, Inc. ADBE Aug. 20
Canadian Solar, Inc. CSIQ Aug. 20
General Motors Co. GM Aug. 20
Starbucks Corp. SBUX Aug. 18
Builders FirstSource, Inc. BLDR Aug. 18
Steel Dynamics, Inc. STLD Aug. 17
Elanco Animal Health, Inc. ELAN Aug. 17
Brinker International, Inc. EAT Aug. 13
Enphase Energy, Inc. ENPH Aug. 13
Nike, Inc. NKE Aug. 11
Nucor Corp. NUE Aug. 11
Freeport McMoRan, Inc. FCX Aug. 10
Natera, Inc. NTRA Aug. 10
Lennar Corp. LEN Aug. 7
McDonald’s Corp. MCD Aug. 7
Industrial Select Sector SPDR XLI Aug. 6
Sunrun, Inc. RUN Aug. 5
Penn National Gaming, Inc. PENN July 30
Procter & Gamble Co. PG July 29
SPDR S&P Metals & Mining ETF XME July 28
iShares MSCI South Korea ETF EWY July 28
Toll Brothers, Inc. TOL July 27
Advanced Micro Devices, Inc. AMD July 23
Best Buy Co., Inc. BBY July 22
Materials Select Sector SPDR XLB July 20
Caterpillar, Inc. CAT July 20
iShares U.S. Home Construction ETF ITB July 17
Progressive Corp. PGR July 17
Livongo Health, Inc. LVGO July 17
Roku, Inc. ROKU July 16
Cognizant Technology Solutions, Inc. CTSH July 16
Consumer Staples Select Sector SPDR XLP July 15
Home Depot, Inc. HD July 15
Costco Wholesale Corp. COST July 15
Air Products & Chemicals, Inc. APD July 14
Consumer Discretionary Select Sector SPDR XLY July 13
SunPower Corp. SPWR July 13
Walmart, Inc. WMT July 8
Big Lots, Inc. BIG July 1
Tandem Diabetes Care, Inc. TNDM July 1
Dell Technologies, Inc. DELL June 30
Danaher Corp. DHR June 24
RH RH June 24
Lowe’s Companies LOW June 19
Fiverr International, Ltd. FVRR June 19
Etsy, Inc. ETSY June 17
HubSpot, Inc. HUBS June 8
Square, Inc. SQ June 8
United Parcel Service, Inc. UPS June 5
FedEx Corp. FDX June 3
SPDR S&P Retail ETF XRT June 3
iShares MSCI Japan ETF EWJ May 29
SolarEdge Technologies, Inc. SEDG May 29
Synopsis, Inc. SNPS May 27
Agilent Technologies, Inc. A May 15
Qualcomm, Inc. QCOM May 12
Salesforce.com, Inc. CRM May 8
Facebook, Inc. FB May 7
Spotify Technology S.A. SPOT May 5
Dollar General Corp. DG Apr. 28
ServiceNow, Inc. NOW Apr. 27
Five9, Inc. FIVN Apr. 24
Chewy, Inc. CHWY Apr. 24
Tesla, Inc. TSLA Apr. 23
VanEck Vectors Semiconductor ETF SMH Apr. 17
Veeva Systems, Inc. VEEV Apr. 17
Okta, Inc. OKTA Apr. 16
Target Corp. TGT Apr. 16
Invesco QQQ Trust QQQ Apr. 14
DocuSign, Inc. DOCU Apr. 3
Zscaler, Inc. ZS Apr. 3
Apple, Inc. AAPL Mar. 27
Nvidia Corp. NVDA Mar. 27
Zoom Video Communications, Inc. ZM Mar. 19
iShares MSCI Emerging Markets ETF EEM Mar. 19
SPDR Gold Shares ETF GLD Jan. 2
Microsoft Corp. MSFT Feb. 22
* Click each symbol for current chart.
US : U.S.: NYSE Arca
$ 374.41
-9.38 -2.44%
Volume: 123.35M
Jan. 27, 2021 8:00p
US : U.S.: Nasdaq
$ 226.09
-11.61 -4.88%
Volume: 5.79M
Jan. 27, 2021 4:00p
US : U.S.: Nasdaq
$ 75.09
-4.42 -5.56%
Volume: 23.51M
Jan. 27, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$88.95 billion
Rev. per Employee
$ 25.79
-1.22 -4.52%
Volume: 37.30M
Jan. 27, 2021 4:03p
P/E Ratio
Dividend Yield
Market Cap
$39.24 billion
Rev. per Employee
$ 93.26
-6.91 -6.90%
Volume: 2.00M
Jan. 27, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$12.90 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 13.91
-0.87 -5.89%
Volume: 13.45M
Jan. 27, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$1.26 billion
Rev. per Employee

Michael Ashbaugh is a columnist for MarketWatch and editor of "The Technical Indicator" newsletter.

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