Charting a bull flag, S&P 500 asserts the range near record highs

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U.S. stocks are mixed early Friday, largely treading water ahead of a three-day weekend.

Against this backdrop, each big three U.S. benchmark has asserted a flag pattern, an orderly four-session range near record highs. Range-bound price action is bullish against the prevailing backdrop.

Before detailing the U.S. markets’ wider view, the S&P 500’s US:SPX  hourly chart highlights the past two weeks.

As illustrated, the S&P remains in consolidation mode, asserting an orderly four-session range.

Tactically, the week-to-date low (3,885) is followed by the firmer breakout point (3,870).

Meanwhile, the Dow Jones Industrial Average US:DJIA  has sustained a less decisive break to record territory.

But here again, the orderly four-session range is technically constructive.

Tactically, recall that the former range top — the 31,236-to-31,272 area — marks a notable floor.

Thursday’s session low (31,244) registered nearby amid a successful retest.

Against this backdrop, the Nasdaq Composite US:COMP has also asserted a four-session holding pattern.

Tactically, the week-to-date low (13,845) is followed by the firmer breakout point, circa 13,730.

Combined, each big three U.S. benchmark has asserted a bull flag, the orderly four-session range near record highs. Constructive price action.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has sustained a decisive break to record territory.

Though near-term extended — and a consolidation phase is underway — the Nasdaq’s 2.0% technical breakout confirms its primary uptrend.

Tactically, the breakout point (13,730) marks the Nasdaq’s first notable floor from current levels.

More broadly, the prevailing upturn originates from major support matching the 2020 peak (12,973).

Looking elsewhere, the Dow Jones Industrial Average has sustained a less decisive break to record highs.

Still, the Dow’s sharp V-shaped reversal from last-ditch support (29,964) has been punctuated by muted mid-month selling pressure. Bullish price action.

To reiterate, a notable floor matches the former range top — the 31,236-to-31,272 area — levels that have underpinned four straight closes.

Meanwhile, the S&P 500 is also digesting a steep February rally to previously uncharted territory.

Consider that its 1.2% breakout has been punctuated by a bull flag, the relatively tight four-session range.

The bigger picture

As detailed above, the major U.S. benchmarks remain in consolidation mode, digesting early-month rallies to record territory.

Against this backdrop, each big three benchmark has asserted a flag-like pattern, the orderly four-session ranges amid still muted selling pressure. Bullish price action. (See the hourly charts.)

Moving to the small-caps, the iShares Russell 2000 ETF US:IWM  is consolidating the most decisive break to record territory.

As detailed repeatedly, the initial spike marked a statistically unusual two standard deviation breakout, encompassing four straight closes atop the 20-day Bollinger bands.

Perhaps more straightforwardly, the small-cap benchmark’s 4.8% breakout confirms its primary uptrend.

Tactically, the “expected” cooling-off period is underway amid a still firmly-bullish longer-term backdrop.

Meanwhile, the SPDR S&P MidCap 400 ETF US:MDY  has modestly extended a less decisive breakout.

The prevailing upturn has encompassed a single close atop the 20-day volatility bands. (Also see the early-November and early-January breaks atop the bands.)

Slightly more broadly, the February rally originates from the breakout point (425.30), an area matching the 2020 peak.

Looking elsewhere, the SPDR Trust S&P 500 US:SPY  has also sustained its February breakout.

Recall that the prevailing upturn originates from major support closely matching the 50-day moving average.

Placing a finer point on the S&P 500, the index remains range-bound, digesting its break to record territory.

Tactically, the week-to-date low (3,885) is followed by the firmer breakout point (3,870). Delving deeper, the 3,830 area remains an inflection point.

More broadly, the S&P 500 has asserted a bull flag, the orderly four-session range near record highs.

On further strength, a near-term target continues to project from the S&P’s late-January range to the 4,010 area, about 2.5% above current levels.

Conversely, the S&P’s breakout point (3,870) is followed by deeper support in the 3,830 area.

Delving deeper, the 50-day moving average, currently 3,770, is followed by the former range bottom (3,750).

Also recall that likely last-ditch support points match the December gap (3,723) and late-January low (3,694). An eventual violation would mark a material “lower low” raising a caution flag.

Beyond technical levels, the S&P 500’s intermediate-term bias remains comfortably bullish, based on today’s backdrop.

Friday’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.

Initially profiled April 17, the VanEck Vectors Semiconductor ETF US:SMH  has returned 90.7% and remains well positioned.

Technically, the group has cleared resistance matching the January peak, reaching record highs on increased volume. An intermediate-term target projects to the 266 area.

Conversely, the breakout point, circa 246.00, is followed by trendline support and the slightly deeper 50-day moving average. The group’s intermediate-term bias remains bullish barring a violation.

Moving to specific names, Intel Corp. US:INTC  is a former, and potential future, semiconductor sector bellwether, as well as a Dow 30 component. (Yield = 2.3%.)

The shares initially spiked one month ago, gapping higher after the company announced the appointment of a new CEO. The breakout punctuated a massive bullish island reversal defined by the July and January gaps. (See the one-year chart.)

More immediately, the subsequent pullback has been underpinned by the 200-day moving average, and punctuated by February follow-through.

Tactically, a notable floor matches the July gap (60.00) and is closely followed by near-term support, circa 59.30. A posture higher signals a firmly-bullish bias.

Also notice the pending golden cross — or bullish 50-day/200-day moving average crossover — an event that will likely signal Friday or Tuesday. (The trending indicators are currently separated by just six hundredths of a point.)

KLA Corp. US:KLAC  is a well positioned large-cap chip equipment name.

As illustrated, the shares have knifed to record highs, clearing the January peak amid a volume spike. The upturn punctuates a one-month range — hinged to the steep early-January rally — laying the groundwork for potentially material follow-through.

Tactically, the breakout point (316.90) is followed by a near-term floor, circa 305.50. The prevailing rally attempt is firmly-intact barring a violation.

Pinterest, Inc. US:PINS  is a large-cap name coming to life.

Earlier this month, the shares knifed to record highs, rising after the company’s strong fourth-quarter results. The subsequent pullback has been comparably flat, fueled by decreased volume.

More immediately, the shares spiked Thursday, rising amid reports the company has discussed a potential acquisition by Microsoft. The upturn has been punctuated by a nominal record high.

Though near-term extended, the shares are attractive on a pullback. Tactically, the post-breakout low (77.90) is followed by the firmer breakout point (76.00).

Finally, Calix, Inc. US:CALX  — initially profiled Dec. 17 — has returned 21.3% and remains well positioned.

As illustrated, the shares have rallied to the range top, rising to challenge record highs on increased volume. An intermediate-term target projects to the 42 area on follow-through.

Conversely, the 50-day moving average has defined the recent trend and is rising toward gap support (36.15). 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* (Click symbol for chart.) Date Profiled
Nvidia Corp. NVDA Feb. 11
Veeva Systems, Inc. VEEV Feb. 11
Helmerich & Payne, Inc. HP Feb. 11
Zoom Video Communications, Inc. ZM Feb. 10
Hologic, Inc. HOLX Feb. 10
McDonald’s Corp. MCD Feb. 10
U.S. Global Jets ETF JETS Feb. 9
Lowe’s Companies, Inc. LOW Feb. 9
Motorola Solutions, Inc. MSI Feb. 9
iShares U.S. Home Construction ETF ITB Feb. 8
Lennar Corp. LEN Feb. 8
Nike, Inc. NKE Feb. 8
Beyond Meat, Inc. BYND Feb. 8
Cisco Systems, Inc. CSCO Feb. 5
KeyCorp KEY Feb. 5
Datadog, Inc. DDOG Feb. 5
Appian Corp. APPN Feb. 4
Diamondback Energy, Inc. FANG Feb. 4
Gogo, Inc. GOGO Feb. 4
Wix.com, Ltd. WIX Feb. 3
CarMax, Inc. KMX Feb. 3
Toll Brothers, Inc. TOL Feb. 2
Eagle Materials, Inc. EXP Feb. 2
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
Zebra Technologies Corp. ZBRA 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
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
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
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
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
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
SailPoint 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
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
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.