Technically speaking, the major U.S. benchmarks continue to trend higher amid a constructive February start. Against this backdrop, each big three benchmark has concurrently registered record highs, knifing from major support to previously uncharted territory. Before detailing the U.S. markets’ wider view, the S&P 500’s
hourly chart highlights the past two weeks.
Meanwhile, the Dow Jones Industrial Average
has broken less decisively to record highs. Nonetheless, the index has edged above its former range top, reaching previously uncharted territory. Recent follow-through punctuates a V-shaped reversal underpinned by major support (29,964) also detailed on the daily chart.
True to recent form, the Nasdaq Composite
remains the strongest major benchmark. The prevailing upturn places the 14,000 mark within view. The index has ventured slightly atop the round number early Tuesday. Conversely, the Nasdaq’s breakout point (13,730) marks its first notable floor.
Widening the view to six months adds perspective. On this wider view, the Nasdaq has extended its break to previously uncharted territory. In the process, the index has registered a sharp rally from 13,000 to 14,000 — about a 7.7% span — across just eight sessions. Tactically, a near-term target continues to project to the 14,200 area. More broadly, the prevailing upturn originates from support matching the 2020 peak (12,973), detailed repeatedly. The late-January low (12,985) registered about 12 points above support.
Looking elsewhere, the Dow Jones Industrial Average has belatedly broken out, notching a single close above the range top. Still, the directionally sharp February rally is technically constructive. Tactically, the prevailing upturn originates from last-ditch support (29,964) — detailed previously — placing the index firmly atop its former breakdown point (30,283). (Also see the hourly chart.)
Meanwhile, the S&P 500 has extended a respectable February breakout. This week’s follow-through punctuates a sharp reversal from major support. Recall the January close registered within two points of the 50-day moving average, an area matching the S&P’s former breakout point. The bigger picture Collectively, the major U.S. benchmarks are off to a bullish February start. On a headline basis, each big three benchmark has reached record territory to punctuate a V-shaped reversal from major support. Specifically, the Nasdaq Composite has rallied from the 2020 peak (12,973), the Dow Jones Industrial Average has maintained last-ditch support (29,964) and the S&P 500 has spiked from support closely matching its 50-day moving average. (See the daily charts.) Each benchmark’s intermediate-term bias remains bullish.
Moving to the small-caps, the iShares Russell 2000 ETF
has knifed more aggressively to record highs. The prevailing upturn marks a two standard deviation breakout, encompassing three straight closes atop the 20-day Bollinger bands. Though still near-term extended — and due a cooling-off period — the statistically unusual breakout improves the chances of longer-term follow-through. (See the equally powerful early-November and early-January breakouts, followed by flattish pullbacks, and upside follow-through)
Meanwhile, the SPDR S&P MidCap 400 ETF
has registered a respectable, though less decisive, February breakout. The MDY is vying Tuesday to register its second straight close atop the 20-day volatility bands amid a two standard deviation breakout. The prevailing upturn originates from familiar support (425.30), an area closely matching the 2020 peak.
Looking elsewhere, the SPDR Trust S&P 500
has extended a respectable — though not off-the-charts — technical breakout. Though the upturn has been fueled by lackluster volume, the rally’s internal strength remains bull-case supportive.
Placing a finer point on the S&P 500, the index has extended its breakout, notching three straight record closes. Recall that the breakout point (3,870) marks the first notable floor from current levels.
More broadly, the prevailing upturn punctuates a V-shaped reversal from major support. The specific area matches the late-December breakout point (3,823) and the 50-day moving average. The January close registered within two points of the 50-day moving average, and has been punctuated by a persistent February rally. On further strength, a near-term target continues to project from the S&P’s late-January range to the 4,010 area, about 2.4% above current levels. Conversely, the S&P’s breakout point (3,870) is followed by a deeper floor in the 3,830 area. Beyond technical levels, the U.S. sub-sector backdrop remains constructive, and the prevailing uptrend is firmly-grounded as it applies to the internals. The S&P 500’s intermediate-term bias remains comfortably bullish, based on today’s backdrop. Also see: Charting a bullish February start: S&P 500 spikes from major support.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 Energy Select Sector SPDR
is acting well technically. (Yield = 4.8%.) As illustrated, the group has rallied to challenge resistance at eight-month highs. The prevailing upturn originates from support roughly matching the 50-day moving average and the mid-2020 range top. Tactically, the response to the prevailing range top should be a useful bull-bear gauge. A near-term target projects to the 50 area on follow-through. Conversely, a near-term floor (41.75) closely matches the December peak. The group’s breakout attempt is intact barring a violation.
Meanwhile, the U.S. Global Jets ETF
is also showing signs of life. The group initially spiked three months ago, gapping sharply higher amid vaccine-fueled optimism. The subsequent two-month range is a bullish continuation pattern, hinged to the initial November spike. Against this backdrop, the February rally places 11-month highs under siege. Tactically, the former range top, circa 23.00, pivots to support. A posture higher signals a bullish near-term bias. More broadly, the tandem airlines and energy sector resurgence is consistent with a reflation trade, an expected return to pre-virus economic conditions. (Fuel is a significant expense for the airlines, and rising energy prices conventionally present a sector headwind.)
Moving to specific names, Lowe’s Companies, Inc.
is a well positioned large-cap home improvement retailer. As illustrated, the shares have rallied to the range top, rising to challenge all-time highs. Monday’s close marked a nominal record close. Tactically, the 50-day moving average has marked an inflection point, and is rising toward the former range top, circa 171.50. A posture atop this area supports a bullish bias. More broadly, the shares are well positioned on the three-year chart, rising from a continuation pattern hinged to the massive 2020 rally.
Initially profiled Oct. 7, Cloudflare, Inc.
has returned 110% and remains well positioned. Technically, the shares have reached record territory, clearing resistance matching the December and January peaks amid increased volume. An intermediate-term target projects to the 99 area. Conversely, the breakout point, circa 87.00, pivots to support. The prevailing uptrend is firmly-intact barring a violation. Note that the company’s quarterly results are due out Feb. 11.
Finally, Motorola Solutions, Inc.
is a well positioned large-cap name. (Yield = 1.6%.) Earlier this month, the shares knifed to 11-month highs, rising after the company’s fourth-quarter results. The breakout punctuates a prolonged nearly four-month base. (The longer the base, the higher the space.) Underlying the upturn, its relative strength index (not illustrated) has tagged its best levels since October, improving the chances of longer-term follow-through. Though still near-term extended, and due to consolidate, the shares are attractive on a pullback. The breakout point (175.20) pivots to support. 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.
Symbol* (Click symbol for chart.)
iShares U.S. Home Construction ETF
Beyond Meat, Inc.
Cisco Systems, Inc.
Diamondback Energy, Inc.
Toll Brothers, Inc.
Eagle Materials, Inc.
Avis Budget Group, Inc.
Capital One Financial Corp.
Rio Tinto Group
Sorrento Therapeutics, Inc.
Invesco Solar ETF
Magna International, Inc.
M.D.C. Holdings, Inc.
Zebra Technologies Corp.
Nexstar Media Group, Inc.
iShares Transportation Average ETF
Energy Select Sector SPDR
Teledoc Health, Inc.
Skyworks Solutions, Inc.
Financial Select Sector SPDR
ShockWave Medical, Inc.
JPMorgan Chase & Co.
Ballard Power Systems, Inc.
United Therapeutics Corp.
CyberArk Software Ltd.
Tenet Healthcare Corp.
iShares Nasdaq Biotechnology ETF
SDPR S&P Regional Banking ETF
Plug Power, Inc.
F5 Networks, Inc.
Emerson Electric Co.
Kulicke and Soffa Industries, Inc.
Spotify Technology S.A.
Valero Energy Corp.
Analog Devices, Inc.
American Airlines Group, Inc.
Zillow Group, Inc.
Bank of America Corp.
SPDR S&P Oil & Gas Exploration and Production ETF
Applied Materials, Inc.
Regions Financial Corp.
Norfolk Southern Corp.
Communications Services Select Sector SPDR
Health Care Select Sector SPDR
Keysight Technologies, Inc.
Exact Sciences Corp.
Universal Display Corp.
Dentsply Sirona, Inc.
Maxim Integrated Products, Inc.
The Travelers Companies, Inc.
Micron Technology, Inc.
Vulcan Materials Co.
ON Semiconductor Corp.
Ford Motor Co.
First Solar, Inc.
SPDR S&P Homebuilders ETF
Shake Shack, Inc.
SPDR S&P Biotech ETF
SailPoint Technology Holdings, Inc.
Martin Marietta Materials, Inc.
Abercrombie & Fitch Co.
Scientific Games Corp.
Five Below, Inc.
Eastman Chemical Co.
Deere & Co.
Johnson Controls International
Canadian Solar, Inc.
General Motors Co.
Builders FirstSource, Inc.
Enphase Energy, Inc.
Freeport McMoRan, Inc.
Industrial Select Sector SPDR
Penn National Gaming, Inc.
SPDR S&P Metals & Mining ETF
iShares MSCI South Korea ETF
Advanced Micro Devices, Inc.
Materials Select Sector SPDR
Consumer Discretionary Select Sector SPDR
Fiverr International, Ltd.
SPDR S&P Retail ETF
iShares MSCI Japan ETF
Agilent Technologies, Inc.
VanEck Vectors Semiconductor ETF
Invesco QQQ Trust
iShares MSCI Emerging Markets ETF
* Click each symbol for current chart.