Charting bull-flag breakout attempts: S&P 500, Nasdaq tag record territory

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Technically speaking, the major U.S. benchmarks continue to trend higher, rising amid a still broadly constructive 2021 start.

More immediately, each big three U.S. benchmark has briefly tagged its latest record high early Tuesday, rising amid bull-flag breakout attempts that remain underway.

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 has cleared the range top, edging to its latest record high.

The prevailing upturn punctuates a bull flag, the prior relatively tight five-session range.

Tactically, the breakout point, circa 3,925, is followed by the former range bottom (3,885).

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

Nonetheless, the Dow’s tight range underpinned by the breakout point — the 31,236-to-31,272 area — is technically constructive.

Against this backdrop, the Nasdaq Composite US:COMP is challenging its range top.

Consider that Friday’s session high (14,102) registered slightly under its record high (14,109).

The index briefly followed through early Tuesday, tagging previously uncharted territory. As always, it’s the session close that matters. A bull-flag breakout attempt is in play.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq is consolidating a sharp early-February rally. Recall the initially decisive 2.0% breakout confirms its primary uptrend.

Tactically, the Nasdaq’s first notable floor matches the breakout point (13,730).

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.

The prevailing upturn marks about a 0.6% breakout, not yet confirming its primary trend.

Nonetheless, the sharp V-shaped reversal from last-ditch support (29,964) — and grinding-higher follow-through — are technically constructive.

Recall that the former range top pivots to support — the 31,236-to-31,272 area — levels also detailed on the hourly chart.

Meanwhile, the S&P 500 has slightly extended its February break to record territory.

Recall that the prevailing flag — the S&P’s tight mid-month range — is a bullish continuation pattern.

The bigger picture

Collectively, the major U.S. benchmarks are acting well technically.

On a headline basis, each big three benchmark has asserted a flag-like pattern — tight one-week ranges — signaling muted selling pressure near record high.

Against this backdrop, each index has at least briefly tagged a record high early Tuesday. Breakout attempts are underway.

Moving to the small-caps, the iShares Russell 2000 ETF US:IWM  is digesting the most decisive break to record territory of the widely-tracked U.S. benchmarks.

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

Separately, the early-month rally marked a strong 4.8% breakout, confirming its primary uptrend.

Though near-term extended — and an overdue sideways chopping around phase is underway — the statistically unusual rally is likely longer-term bullish.

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

Recall that the prevailing upturn originates from the breakout point (425.30), an area matching the 2020 peak.

Looking elsewhere, the SPDR Trust S&P 500 US:SPY  has fractionally extended its uptrend amid grinding-higher price action.

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 has narrowly tagged its latest record high to punctuate a five-session flag pattern. A breakout attempt is in play.

On further strength, a near-term target continues to project from the S&P’s late-January range to the 4,010 area, about 1.9% above current levels.

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

Delving deeper, the 50-day moving average, currently 3,775, 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” likely raising a caution flag.

Beyond specific levels, the S&P 500’s intermediate-term uptrend remains firmly-grounded 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 Financial Select Sector SPDR US:XLF  is rattling the cage on a potential breakout. (Yield = 2.0%.)

Specifcially, the group has rallied to the range top, rising to challenge its record high (31.62) established last month.

The tight prevailing one-week range signals muted selling pressure near resistance, improving the chances of an eventual breakout. An intermediate-term target projects to the 33.50 area on follow-through.

Slightly more broadly, the prevailing upturn originates from the breakout point, circa 29,00, a key bull-bear fulcrum detailed previously. (See the Jan. 26 review and Feb. 1 review.)

Meanwhile, the iShares Transportation Average ETF US:IYT  has also reached a major technical test.

Namely, the group is challenging its record high matching the January peak (232.97). An intermediate-term target projects to the 250 area on follow-through.

Here again, the prevailing upturn punctuates a successful test of major support — the 212.80-to-214.50 area — detailed previously. (See the Jan. 26 review.)

(The January low (212.80), established Jan. 29, precisely matched last-ditch support.)

Combined, the transports and financials are traditional sector leaders. The tandem prevailing breakout attempts signal a firmly-grounded U.S. sub-sector backdrop.

Initially profiled Dec. 2, Analog Devices, Inc. US:ADI  has returned 14.2% and remains well positioned.

Technically, the shares have rallied to the range top, rising to press record territory.

The prevailing upturn punctuates a successful test of the breakout point (146.10) and the 50-day moving average. Tactically, a breakout attempt is in play barring a violation of near-term support, circa 154.25.

Inphi Corp. US:IPHI  is a well positioned large-cap semiconductor name.

As illustrated, the shares have staged an orderly pullback from record highs, finding support slightly above the breakout point. The prevailing upturn positions the shares for a potential retest of the January peak.

Tactically, the 50-day moving average, currently 164.40, has marked a bull-bear inflection point. The prevailing uptrend is comfortably intact barring a violation.

Public since March 2018, Lyft, Inc. US:LYFT  is a well positioned large-cap name.

Technically, the shares have staged a nearly straightline February rally, knifing to 17-month highs. The upturn has been punctuated by last week’s strong-volume spike after the company’s fourth-quarter results.

Though near-term extended, and due to consolidate, the shares are attractive on a pullback. Tactically, gap support (55.26) is followed by the firmer breakout point (50.70).

More broadly, the prevailing upturn punctuates an orderly two-month range hinged to the November vaccine-fueled gap atop the 200-day moving average. Bullish price action.

Finally, Builders FirstSource, Inc. US:BLDR  — initially profiled Aug. 18 — has returned 44.6% and remains well positioned.

Earlier this month, the shares rallied to record highs, edging atop resistance matching the December and January peaks.

The subsequent flag — the tight one-week range — is a bullish continuation pattern, likely positioning the shares to extend the uptrend. Tactically, the breakout point (42.40) is closely followed by the post-breakout low (42.12) and the ascending 50-day moving average, currently 39.95.

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
Intel Corp. INTC Feb. 12
KLA Corp. KLAC Feb. 12
Pinterest, Inc. PINS Feb. 12
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.