Technically speaking, the U.S. benchmarks are off to a strong February start, rising in the wake of the most aggressive market downturn in about three months.
Against this backdrop, each big three benchmark has extended a reversal from major support, rallies preserving a bullish intermediate-term technical bias.
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 weathered a jagged retest of major support closely matching the 50-day moving average.
Last week’s close registered less than two points from the 50-day — (the trending indicator has since “moved” slightly higher) — and the S&P has rallied respectably from support.
Monday’s session high (3,784) closely matched next resistance (3,783) and has been punctuated by Tuesday’s early follow-through. Bullish price action.
The specific area matches the mid-November range top (29,964), also illustrated on the daily chart.
More immediately, Tuesday’s strong start places the Dow firmly back atop its 50-day moving average. Additional overhead matches the former range bottom, circa 30,790.
Against this backdrop, the Nasdaq Composite
has also rallied from major support.
In its case, the specific area matches the 2020 peak (12,973) detailed previously.
Last week’s low (12,985) registered slightly above support, and the index has subsequently reversed to the former range. Constructive price action.
Combined, each big three benchmark has maintained a relatively well-defined support point.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has weathered a respectable pullback from record highs.
To reiterate, the downturn has been underpinned by a notable floor matching the 2020 peak (12,973). Last week’s low registered about 12 points above support.
Tactically, the prevailing upturn preserves a comfortably bullish intermediate-term bias. (The recent downturn filled the mid-January gap, and has been punctuated by a rally to the former range from well-defined support. Bullish price action.)
Looking elsewhere, the Dow Jones Industrial Average registered the most damaging late-January downturn.
This is the only big three U.S. benchmark to venture materially under its 50-day moving average.
Still, the index has maintained last-ditch support, an area matching the mid-November range top (29,964), detailed previously. Tuesday’s strong start punctuates a pronounced bullish reversal from support.
Meanwhile, the S&P 500 has weathered a jagged turn-of-the-month retest of major support.
In its case, the 50-day moving average, currently 3,724, matches a familiar floor in the 3,723-to-3,726 area.
The bigger picture
Collectively, the major U.S. benchmarks seem to have weathered the strongest market downturn in about three months.
In the process, each big three benchmark has rallied respectably from notable support.
Specifically, the Nasdaq Composite has maintained the 2020 peak (12,973), the Dow Jones Industrial Average has maintained its former breakout point (29,964) and the S&P 500 has staged a jagged test of its 50-day moving average. (See the daily charts.)
Each benchmark’s intermediate-term bias has remained bullish throughout the recent downturn.
Moving to the small-caps, the iShares Russell 2000 ETF
is digesting a decisive early-January breakout.
Tactically, the post-breakout low (204.66) is followed by the breakout point (201.20), areas that have underpinned the pullback.
Meanwhile, the SPDR S&P MidCap 400 ETF
has pulled in slightly more aggressively from recent record highs.
Still, the downturn has been underpinned by the breakout point (425.30). Conversely, the former range bottom (434.40) remains an inflection point.
Looking elsewhere, the SPDR Trust S&P 500
has absorbed a strong-volume pullback to major support.
But also recall that the downturn registered as internally lackluster, selling pressure inconsistent with a major trend shift.
Placing a finer point on the S&P 500, the index has maintained familiar support.
The specific area matches the December gap (3,723) and the 50-day moving average, currently 3,724.
The prevailing rally to the former range signals bullish momentum is intact. (Consider that the breakdown point (3,750) would be expected to draw selling pressure if market bears were setting the technical tone.)
More broadly, the prevailing upturn punctuates a bullish reversal from the 50-day moving average.
Delving deeper, the post-breakout low (3,662) — also the January low — is closely followed by major support at 3,646. (The November peak (3,645.99) and early-December gap (3,645.87) closely matched.)
Tactically, the S&P 3,646 area marks likely last-ditch support. An eventual violation would raise an intermediate-term caution flag. (This area corresponds to the Dow industrials’ recent successful test of the mid-November range top.)
Beyond technical levels, the S&P 500’s intermediate-term bias remains bullish, based on today’s backdrop.
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 SPDR S&P Biotech ETF
is acting well technically.
As illustrated, the group effectively flatlined amid the recent market downturn, before rising to tag a nominal record high.
The prevailing upturn has been fueled by a volume uptick to punctuate a late-January flag-like pattern.
Tactically, trendline support closely matches the former range bottom, circa 150. A sustained posture higher signals a firmly-bullish bias.
Meanwhile, the SPDR S&P Regional Banking ETF
is also technically well positioned. (Yield = 2.8%.)
The group started the year with a breakout, gapping to two-year highs. The upturn punctuated an unusually tight December range.
More immediately, the prevailing pullback has been underpinned by the top of the gap (54.00), placing the group 8.1% under the January peak.
Tactically, trendline support roughly tracks the 50-day moving average and is followed by the breakout point (51.70). The prevailing uptrend is intact barring a violation.
Initially profiled Jan. 8 — amid the break atop trendline resistance — Teledoc Health, Inc.
has returned 15.4% and remains well positioned.
Late last month, the shares knifed to record highs, rising amid a nearly straightline strong-volume spike.
The subsequent pullback has been comparably flat, fueled by decreased volume, placing the shares 11.6% under the January peak. Tactically, the August peak (253.00) marks an inflection point and is followed by the firmer breakout point (235.00).
More broadly, the shares are well positioned on the three-year chart, digesting a break from the prolonged late-2020 range.
Eagle Materials, Inc.
is a mid-cap producer of heavy-construction and light-building materials.
Technically, the shares started January with a breakout, gapping to three-year highs amid a volume spike. The subsequent range is a bullish continuation pattern, underpinned by the top of the gap (106.80).
More immediately, the prevailing upturn has been fueled by increased volume — following the company’s better-than-expected third-quarter results, released Thursday — placing the range top under siege. A near-term target projects to the 122 area on follow-through.
Finally, Toll Brothers, Inc.
is a well positioned large-cap homebuilder.
As illustrated, the shares have recently knifed to 15-year highs, clearing resistance matching the October and December peaks.
The subsequent flattish pullback places the shares near the breakout point, and 6.5% under the January peak.
On a granular note, Monday’s session low (49.51) almost precisely matched the December peak (49.52) and has been punctuated by a bullish reversal. The prevailing rally attempt is intact barring a violation of this area.
More broadly, the shares are well positioned on the three-year chart, building on the massive 2020 V-shaped reversal. An intermediate-term target projects to the 58 area.
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|
|Netgear, Inc.||NTGR||Feb. 1|
|Avis Budget Group, Inc.||CAR||Feb. 1|
|Capital One Financial Corp.||COF||Jan. 29|
|NetApp, Inc.||NTAP||Jan. 29|
|Aptiv, plc||APTV||Jan. 29|
|Rio Tinto Group||RIO||Jan. 26|
|Sorrento Therapeutics, Inc.||SRNE||Jan. 26|
|Netflix, Inc.||NFLX||Jan. 25|
|Cummins, Inc.||CMI||Jan. 25|
|Invesco Solar ETF||TAN||Jan. 22|
|Magna International, Inc.||MGA||Jan. 22|
|M.D.C. Holdings, Inc.||MDC||Jan. 22|
|Electronic Arts, Inc.||EA||Jan. 21|
|Zebra Technologies Corp.||ZBRA||Jan. 14|
|Juniper Networks, Inc.||JNPR||Jan. 14|
|Chegg, Inc.||CHGG||Jan. 11|
|Macy’s, Inc.||M||Jan. 11|
|Nexstar Media Group, Inc.||NXST||Jan. 11|
|iShares Transportation Average ETF||IYT||Jan. 11|
|Energy Select Sector SPDR||XLE||Jan. 8|
|Teledoc Health, Inc.||TDOC||Jan. 8|
|Skyworks Solutions, Inc.||SWKS||Jan. 7|
|Financial Select Sector SPDR||XLF||Jan. 7|
|FireEye, Inc.||FEYE||Jan. 5|
|Check Point Software Technologies||CHKP||Jan. 4|
|Synaptics, Inc.||SYNA||Jan. 4|
|Sunrun, Inc.||RUN||Dec. 23|
|ShockWave Medical, Inc.||SWAV||Dec. 23|
|JPMorgan Chase & Co.||JPM||Dec. 22|
|Ballard Power Systems, Inc.||BLDP||Dec. 21|
|LivePerson, Inc.||LPSN||Dec. 21|
|United Therapeutics Corp.||UTHR||Dec. 21|
|Shopify, Inc.||SHOP||Dec. 18|
|CyberArk Software Ltd.||CYBR||Dec. 18|
|Calix, Inc.||CALX||Dec. 17|
|Elastic N.V.||ESTC||Dec. 17|
|Cerner Corp.||CERN||Dec. 17|
|Tenet Healthcare Corp.||THC||Dec. 16|
|Williams-Sonoma, Inc.||WSM||Dec. 15|
|iShares Nasdaq Biotechnology ETF||IBB||Dec. 15|
|SDPR S&P Regional Banking ETF||KRE||Dec. 14|
|Etsy, Inc.||ETSY||Dec. 14|
|Plug Power, Inc.||PLUG||Dec. 9|
|F5 Networks, Inc.||FFIV||Dec. 8|
|Emerson Electric Co.||EMR||Dec. 8|
|Zscaler, Inc.||ZS||Dec. 7|
|Fortinet, Inc.||FTNT||Dec. 7|
|Kulicke and Soffa Industries, Inc.||KLIC||Dec. 7|
|Dillard’s, Inc.||DDS||Dec. 4|
|Spotify Technology S.A.||SPOT||Dec. 3|
|Valero Energy Corp.||VLO||Dec. 3|
|Analog Devices, Inc.||ADI||Dec. 2|
|Cirrus Logic, Inc.||CRUS||Dec. 1|
|Sonos, Inc.||SONO||Dec. 1|
|American Airlines Group, Inc.||AAL||Nov. 30|
|Zillow Group, Inc.||ZG||Nov. 23|
|Bank of America Corp.||BAC||Nov. 20|
|SPDR S&P Oil & Gas Exploration and Production ETF||XOP||Nov. 20|
|MetLife, Inc.||MET||Nov. 19|
|Kohl’s Corp.||KSS||Nov. 18|
|Applied Materials, Inc.||AMAT||Nov. 17|
|RingCentral, Inc.||RNG||Nov. 13|
|Regions Financial Corp.||RF||Nov. 13|
|Snap, Inc.||SNAP||Nov. 9|
|Norfolk Southern Corp.||NSC||Nov. 9|
|Communications Services Select Sector SPDR||XLC||Nov. 5|
|Health Care Select Sector SPDR||XLV||Nov. 5|
|Alphabet, Inc.||GOOGL||Nov. 5|
|Keysight Technologies, Inc.||KEYS||Nov. 4|
|Harley-Davidson, Inc.||HOG||Nov. 4|
|8×8, Inc.||EGHT||Nov. 3|
|Exact Sciences Corp.||EXAS||Nov. 2|
|Universal Display Corp.||OLED||Nov. 2|
|Dentsply Sirona, Inc.||XRAY||Oct. 27|
|Maxim Integrated Products, Inc.||MXIM||Oct. 21|
|The Travelers Companies, Inc.||TRV||Oct. 21|
|Micron Technology, Inc.||MU||Oct. 20|
|Vulcan Materials Co.||VMC||Oct. 19|
|ON Semiconductor Corp.||ON||Oct. 16|
|Ford Motor Co.||F||Oct. 15|
|First Solar, Inc.||FSLR||Oct. 13|
|Teradyne, Inc.||TER||Oct. 12|
|SPDR S&P Homebuilders ETF||XHB||Oct. 9|
|Shake Shack, Inc.||SHAK||Oct. 9|
|SPDR S&P Biotech ETF||XBI||Oct. 8|
|Twilio, Inc.||TWLO||Oct. 8|
|Cloudflare, Inc.||NET||Oct. 7|
|RSailPoint Technology Holdings, Inc.||SAIL||Oct. 1|
|Martin Marietta Materials, Inc.||MLM||Sept. 30|
|Abercrombie & Fitch Co.||ANF||Sept. 29|
|Zendesk, Inc.||ZEN||Sept. 23|
|Scientific Games Corp.||SGMS||Sept. 23|
|Crocs, Inc.||CROX||Sept. 14|
|Five Below, Inc.||FIVE||Sept. 10|
|Eastman Chemical Co.||EMN||Sept. 10|
|International Paper Co.||IP||Sept. 3|
|Deere & Co.||DE||Aug. 24|
|Johnson Controls International||JCI||Aug. 21|
|Canadian Solar, Inc.||CSIQ||Aug. 20|
|General Motors Co.||GM||Aug. 20|
|Builders FirstSource, Inc.||BLDR||Aug. 18|
|Enphase Energy, Inc.||ENPH||Aug. 13|
|Freeport McMoRan, Inc.||FCX||Aug. 10|
|Industrial Select Sector SPDR||XLI||Aug. 6|
|Penn National Gaming, Inc.||PENN||July 30|
|SPDR S&P Metals & Mining ETF||XME||July 28|
|iShares MSCI South Korea ETF||EWY||July 28|
|Advanced Micro Devices, Inc.||AMD||July 23|
|Materials Select Sector SPDR||XLB||July 20|
|Caterpillar, Inc.||CAT||July 20|
|Roku, Inc.||ROKU||July 16|
|Consumer Discretionary Select Sector SPDR||XLY||July 13|
|SunPower Corp.||SPWR||July 13|
|Danaher Corp.||DHR||June 24|
|Fiverr International, Ltd.||FVRR||June 19|
|Square, Inc.||SQ||June 8|
|SPDR S&P Retail ETF||XRT||June 3|
|iShares MSCI Japan ETF||EWJ||May 29|
|Synopsis, Inc.||SNPS||May 27|
|Agilent Technologies, Inc.||A||May 15|
|Qualcomm, Inc.||QCOM||May 12|
|Five9, Inc.||FIVN||Apr. 24|
|Chewy, Inc.||CHWY||Apr. 24|
|Tesla, Inc.||TSLA||Apr. 23|
|VanEck Vectors Semiconductor ETF||SMH||Apr. 17|
|Okta, Inc.||OKTA||Apr. 16|
|Target Corp.||TGT||Apr. 16|
|Invesco QQQ Trust||QQQ||Apr. 14|
|Apple, Inc.||AAPL||Mar. 27|
|iShares MSCI Emerging Markets ETF||EEM||Mar. 19|
|Microsoft Corp.||MSFT||Feb. 22|
|* Click each symbol for current chart.|