Technically speaking, the major U.S. benchmarks are off to an unseasonally bullish August start.
On a headline basis, the S&P 500 has extended its rally from major support (2,802) while the Nasdaq Composite has knifed from a key trendline. The early-month upturn places both benchmarks within striking distance of record territory.
Before detailing the U.S. markets’ wider view, the S&P 500’s
hourly chart highlights the past two weeks.
As illustrated, the S&P has extended its rally from the breakout point (2,802) reaching six-month highs. The July peak (2,848) pivots to near-term support.
Conversely, the slight breakout places the S&P’s all-time high (2,872.87) firmly within striking distance.
Meanwhile, the Dow Jones Industrial Average has rallied toward its range top.
Tactically, an inflection point matches the March peak (25,450) and is followed by resistance at the July peak (25,287).
Conversely, the prevailing upturn originates from trendline support, illustrated on the daily chart
Against this backdrop, the Nasdaq Composite has also extended its August rally.
In the process, the index has reclaimed its breakdown point, a level defined by the June peak (7,806). The prevailing upturn punctuates a successful test of trendline support, illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has knifed from trendline support, rising to notch consecutive closes atop its breakdown point (7,806). The upturn places the Nasdaq’s record high (7,933.3) within view.
Conversely, the trendline closely tracks the 50-day moving average, currently 7,696, and last week’s successful retest preserves a bullish intermediate-term bias.
Looking elsewhere, the Dow Jones Industrial Average is acting well technically.
As illustrated, the index has sustained a break atop trendline resistance, and is broadly holding five-month highs.
Moreover, the prevailing flag-like pattern has been underpinned by the trendline, positioning the Dow to build on the July breakout.
Meanwhile, the S&P 500 has edged to six-month highs, and within view of its record peak (2,872.87).
The August upturn punctuates a slightly jagged, but successful, retest of the 2,802 breakout point.
The bigger picture
Collectively, the big three U.S. benchmarks have rallied from well-defined support to start August. Specifically:
- The Nasdaq Composite has nailed trendline support, rising to reclaim its breakdown point (7,806).
- The Dow industrials have also maintained trendline support, rising to challenge five-month highs.
- The S&P 500 has rallied from its breakout point (2,802), rising to six-month highs.
The successful retests of support are technically constructive.
Moving to the small-caps, the iShares Russell 2000 ETF
has recently hugged its trendline, a level closely tracking the 50-day moving average, currently 166.60.
Tactically, a rally atop the trendline likely opens the path to a retest of the IWM’s record close (169.97) and absolute record peak (170.20).
Meanwhile, the SPDR S&P MidCap 400 has rallied respectably from trendline support.
In fact, Monday’s close (365.75) marked a fractional record close, narrowly eclipsing the former record (365.62).
Moreover, the MDY has ventured atop its absolute record peak (366.71) early Tuesday, reaching uncharted territory.
Put differently, the mid-caps are the first widely-tracked U.S. benchmark to tag August record highs. An intermediate-term target projects to the 377 area.
Against this backdrop, the SPDR Trust S&P 500 has extended its mid-year breakout, reaching six-month highs. The prevailing upturn punctuates last week’s successful retest of major support.
Similarly, the S&P 500’s backdrop remains bullish, and increasingly straightforward.
To reiterate, the S&P has maintained its breakout point (2,802), staging tandem successful retests last week.
The subsequent rally to six-month highs places record territory firmly within view. The S&P’s record close (2,872.87) precisely matches its absolute record peak, established Jan. 26.
As always, it’s the pending response to this area that’s worth tracking. The chances of a breakout improve to the extent an index hods tightly to resistance. (See the mid-July price action.)
Beyond the S&P 500, last week’s successful tests of trendline support — on the Nasdaq Composite and Dow industrials — are also bull-base supportive.
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 transports’ backdrop continues to strengthen.
As illustrated, the iShares Transportation Average ETF
has rallied to the range top, rising to challenge six-month highs.
More broadly, the upturn punctuates a multi-month continuation pattern — illustrated on the three-year chart — likely opening the path to a retest of record highs matching the January peak.
As an economically-sensitive sector, the transports’ resurgence strengthens the bull case.
Initially profiled June 13, the Consumer Staples Select Sector SPDR has added 5.8% and remains well positioned. (Yield = 2.8%.)
Technically, the group has knifed to four-month highs, clearing the 200-day moving average for the first time since February. The breakout point (53.40) closely matches the 200-day, and pivots to first support.
Also notice the pending golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the primary trend.
More broadly, the group’s resurgence is consistent with a rotational, and still strengthening, U.S. sub-sector backdrop.
Moving to specific names, Xilinx, Inc.
is a large-cap semiconductor name coming to life. (Yield = 2.1%.)
Late last month, the shares gapped sharply higher, clearing trendline resistance after the company’s quarterly results.
The ensuing pullback has been orderly, underpinned by the 200-day moving average, positioning the shares to build on the July spike. Tactically, the 200-day is a widely-tracked longer-term trending indicator, currently 70.10, and the recovery attempt is intact barring a violation.
is a well positioned large-cap chip equipment name.
As illustrated, the shares have rallied atop trendline resistance and the breakdown point, an area matching the May low.
Underlying the upturn, its relative strength index (not illustrated) has registered four-month highs, improving the chances of a durable trend shift.
The trendline closely tracks the 50-day moving average, currently 48.25, and the rally attempt is intact barring a violation.
Integrated Device Technology, Inc.
is a mid-cap semiconductor name positioned to rise.
Technically, the shares have edged to 16-year highs, clearing resistance matching the June and July peaks.
The upturn resolves an ascending triangle, opening the path to less-charted territory, and potentially material follow-through. A near-term target projects to the 38 area.
Myriad Genetics, Inc.
is a well positioned mid-cap biotech name.
The shares initially spiked four weeks ago, gapping higher after an analyst upgrade.
The subsequent tight one-month range signals muted selling pressure, positioning the shares to build on the July rally. Tactically, a near-term floor matches the late-July low (42.60), and a breakout attempt is in play barring a violation.
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.
|Health Care Select Sector SPDR||XLV||Aug. 6|
|American Tower Corp.||AMT||Aug. 6|
|Cognex Corp.||CGNX||Aug. 6|
|Phillips 66||PSX||Aug. 6|
|KLA-Tencor Corp.||KLAC||Aug. 3|
|Global Payments, Inc.||GPN||Aug. 3|
|SM Energy Co.||SM||Aug. 3|
|Venom Energy Partners||VNOM||Aug. 2|
|Flir Systems, Inc.||FLIR||Aug. 2|
|Cypress Semiconductor Corp.||CY||Aug. 1|
|Yext, Inc.||YEXT||Aug. 1|
|SunTrust Banks, Inc.||STI||July 30|
|M&T Bank Corp.||MTB||July 30|
|Lattice Semiconductor Corp.||LSCC||July 30|
|American Airlines Group, Inc.||AAL||July 27|
|Amgen, Inc.||AMGN||July 27|
|Mosaic Co.||MOS||July 27|
|PPG Industries, Inc.||PPG||July 26|
|Valero Energy Corp.||VLO||July 26|
|Pfizer, Inc.||PFE||July 25|
|Financial Select Sector SPDR||XLF||July 24|
|Northern Trust Corp.||NTRS||July 24|
|Stanley Black & Decker, Inc.||SWK||July 23|
|SS&C Technologies Holdings, Inc.||SSNC||July 23|
|Arconic, Inc.||ARNC||July 23|
|Taiwan Semiconductor Manufacturing Co.||TSM||July 20|
|Bank of America Corp.||BAC||July 20|
|JPMorgan Chase and Co.||JPM||July 19|
|Cummins, Inc.||CMI||July 19|
|Citrix Systems, Inc.||CTXS||July 18|
|Corning, Inc.||GLW||July 18|
|Kulicke and Soffa Industries, Inc.||KLIC||July 18|
|Five Below, Inc.||FIVE||July 17|
|Sony Corp.||SNE||July 16|
|Celgene Corp.||CELG||July 16|
|Walmart, Inc.||WMT||July 16|
|National Oilwell Varco, Inc.||NOV||July 13|
|Visa, inc.||V||July 12|
|Walt Disney Co.||DIS||July 12|
|Paychex, Inc.||PAYX||July 11|
|Transocean, Ltd.||RIG||July 11|
|Coca-Cola Co.||KO||July 10|
|3M Co.||MMM||July 10|
|NetEase, Inc.||NTES||July 9|
|Seattle Genetics, Inc.||SGEN||July 9|
|Johnson & Johnson||JNJ||July 5|
|Kroger Co.||KR||July 5|
|Silicon Motion Technology Corp.||SIMO||July 3|
|CyrusOne, Inc.||CONE||July 3|
|FleetCor Technologies, Inc.||FLT||July 2|
|Tandem Diabetes Care, Inc.||TNDM||July 2|
|Diamond Offshore Drilling, Inc.||DO||July 2|
|Oceaneering International, Inc.||OII||June 29|
|NII Holdings, Inc.||NIHD||June 29|
|BioMarin Pharmaceutical, Inc.||BMRN||June 27|
|Church & Dwight Co., Inc.||CHD||June 27|
|CF Industries Holdings, Inc.||CF||June 25|
|Procter & Gamble Co.||PG||June 22|
|Semtech Corp.||SMTC||June 22|
|Merck & Co., Inc.||MRK||June 21|
|Vishay Intertechnology, Inc.||VSH||June 18|
|Alphabet, Inc.||GOOGL||June 15|
|Pepsico, Inc.||PEP||June 14|
|Mosaic Co.||MOS||June 13|
|Consumer Staples Select Sector SPDR||XLP||June 13|
|Roku, Inc.||ROKU||June 12|
|Analog Devices, Inc.||ADI||June 12|
|Viking Therapeutics, Inc.||VKTX||June 12|
|Medicines Co.||MDCO||June 11|
|Health Care Select Sector SPDR||XLV||June 8|
|Monster Beverage Corp.||MNST||June 7|
|VMWare, Inc.||VMW||June 6|
|SPDR S&P Biotech ETF||XBI||June 5|
|Kohl’s Corp.||KSS||June 5|
|Supernus Pharmaceuticals, Inc.||SUPN||May 23|
|Union Pacific Corp.||UNP||May 21|
|Twilio, Inc.||TWLO||May 21|
|Energy Select Sector SDPR||XLE||May 18|
|SPDR S&P Metals & Mining ETF||XME||May 17|
|SPDR S&P Retail ETF||XRT||May 15|
|Lowe’s Companies, Inc.||LOW||May 14|
|Texas Instruments, Inc.||TXN||May 11|
|PowerShares QQQ Trust||QQQ||May 10|
|SPDR S&P Oil and Gas Exploration & Production ETF||XOP||May 9|
|Coupa Software, Inc.||COUP||May 8|
|Apple, Inc.||AAPL||May 7|
|PDC Energy, Inc.||PDCE||May 7|
|Norfolk Southern Corp.||NSC||May 2|
|Advanced Micro Devices, Inc.||AMD||May 1|
|UnitedHealth Group, Inc.||UNH||Apr. 30|
|Nike, Inc.||NKE||Apr. 30|
|DSW, Inc.||DSW||Apr. 30|
|Home Depot, Inc.||HD||Apr. 27|
|Costco Wholesale Corp.||COST||Apr. 26|
|CSX Corp.||CSX||Apr. 26|
|EOG Resources, Inc.||EOG||Apr. 11|
|NetApp, Inc.||NTAP||Apr. 9|
|Domino’s Pizza, Inc.||DPZ||Mar. 21|
|Burlington Stores, Inc.||BURL||Mar. 14|
|Baozun, Inc.||BZUN||Mar. 9|
|TJX Companies, Inc.||TJX||Mar. 6|
|Chart Industries, Inc.||GTLS||Mar. 6|
|Macy’s, Inc.||M||Mar. 5|
|LivePerson, Inc.||LPSN||Feb. 28|
|VeriSign, Inc.||VRSN||Feb. 26|
|ServiceNow, Inc.||NOW||Feb. 21|
|Adobe Systems, Inc.||ADBE||Feb. 16|
|Salesforce.com, Inc.||CRM||Feb. 12|
|Fortinet, Inc.||FTNT||Jan 19|
|Sarepta Therapeutics, Inc.||SRPT||Jan. 3|
|MSCI, Inc.||MSCI||Nov. 20|
|Motorola Solutions, Inc.||MSI||Nov. 14|
|Lululemon Athletica, Inc.||LULU||Oct. 24|
|HubSpot, Inc.||HUBS||Oct. 4|
|Nvidia Corp.||NVDA||Sept. 27|
|Bottomline Technologies, Inc.||EPAY||July 13|
|GrubHub, Inc.||GRUB||May 4|
|Square, Inc.||SQ||Mar. 3|
|Microsoft Corp.||MSFT||Aug. 5|
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