Charting a bullish technical tilt: S&P 500, Nasdaq rise within view of record territory


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












SPX, +0.38%










 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












IWM, +0.29%










 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.

See also: Bull trend strengthens: S&P 500, Nasdaq extend July technical breakouts.

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












IYT, +0.34%










 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.












XLNX, +0.98%










 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.






Applied Materials












AMAT, -0.16%










 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.












IDTI, +0.68%










 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.












MYGN, -0.36%










 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.

Company Symbol Date Profiled
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
Andeavor ANDV 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
Sanofi SNY July 23
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
RH RH 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
Allergan AGN 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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