The Technical Indicator: Charting a bullish technical tilt, S&P 500 rattles cage on major resistance

Technically speaking, the U.S. benchmarks’ jagged April rally attempt has reached potentially consequential tests.

On a headline basis, the S&P 500 is challenging major resistance — S&P 2,695, matching the 2017 peak — and a sustained break higher would strengthen the bull case.

Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +1.00%  hourly chart highlights the past two weeks.

As illustrated, the S&P continues to challenge significant overhead.

The familiar area broadly spans from 2,673 to 2,695, levels matching the 2017 close and 2017 peak.

Separately, the 50-day moving average, currently 2,686, rests within the resistance band. The S&P has not closed atop the 50-day since March 16, just over one month ago.

Similarly, the Dow Jones Industrial Average is pressing notable overhead.

In its case, the 50-day moving average, currently 24,607, is followed by an inflection point matching the 2017 close (24,719).

This area broadly matches trendline resistance, illustrated on the daily chart.

Perhaps not surprisingly, the Nasdaq Composite is also challenging its range top.

Here again, the specific area closely matches the 50-day moving average, currently 7,192.

As always, the 50-day is a widely-tracked intermediate-term trending indicator, and it has marked an inflection point, better illustrated below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended its jagged April rally attempt, notching three straight closes atop the breakdown point (7,085).

To reiterate, the descending 50-day moving average, currently 7,192, is under siege. The Nasdaq has not closed atop the 50-day since March 21.

More distant overhead (7,255) matches the post-breakdown peak and the bottom of the March gap (7,303).

Looking elsewhere, the Dow Jones Industrial Average has reached a headline technical test.

Recall three inflection points, detailed previously:

  • The 50-day moving average, currently 24,607.
  • Resistance matching the 2017 close of 24,719.
  • Resistance matching the 2017 peak of 24,876.

These areas generally match trendline resistance pinned to the January peak.

Consider that the Dow has not closed atop the 50-day moving average since March 9, and has not registered consecutive closes higher since February. A sustained break atop the 50-day would strengthen the bull case.

Meanwhile, the S&P 500 is challenging familiar overhead broadly spanning from 2,673 to 2,695.

To reiterate, the 50-day moving average, currently 2,686, matches resistance. The S&P has struggled to sustain a posture higher following the February breakdown.

The bigger picture

Broadly speaking, the U.S. benchmarks’ jagged April rally attempt has reached potentially consequential technical tests.

On a headline basis, each big three benchmark is pressing the 50-day moving average, venturing higher for the first time this month.

And as it applies to the S&P 500 and Dow industrials, the 50-day moving average closely matches major resistance.

Moving to the small-caps, the iShares Russell 2000 ETF has extended its April upturn, reaching familiar overhead.

Consider that Monday’s close (155.37) effectively matched the 2017 peak (155.41). The small-cap benchmark has ventured firmly higher early Tuesday.

Meanwhile, the S&P MidCap 400’s backdrop remains incrementally softer.

Still, the MDY has edged atop the 50-day moving average, currently 342.90, rising within view of resistance matching the 2017 peak (349.16).

Against this backdrop, the SPDR Trust S&P 500 has reached a key technical test.

The specific area spans from 268.60 to 268.87, levels matching the 2017 peak and the bottom of the March gap.

On further strength, additional overhead matches the top of the March gap (270.19).

Summing up the backdrop

All told, headline technical tests are currently underway, across the widely-tracked U.S. benchmarks.

Against this backdrop, the prevailing rally gets low marks for style, as measured by volume, breadth and sector participation.

A relatively narrow technology sector and transports resurgence has paced the latest leg higher, amid lackluster participation elsewhere, including most notably, the financials.

Nonetheless, price action trumps other indicators, and well-defined overhead is under siege.

Tactically, familiar S&P 500 resistance rests at 2,695.

This level matches the 2017 peak, as well as the March 22 peak, capping the 9-to-1 down day amid the violation of trendline support. (Put differently, declining volume surpassed advancing volume by a 9-to-1 margin as the S&P 500 violated trendine support.)

A close atop 2,695 would mark progress — the S&P’s first rally atop material resistance — also placing it above the 50-day moving average for the first time in one month.

To the extent such a move is sustained — a genuine question mark, based on today’s technicals — the S&P 500’s backdrop supports a bullish intermediate-term bias. The S&P has not truly “trended” since January.

Beyond technical levels, the ongoing response to a thus far solid batch of quarterly earnings reports should add color.

See also: Charting a corrective bounce, U.S. benchmarks spike amid bearish second-quarter start.

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 iShares Transportation Average ETF IYT, -0.37%  has come to life technically.

As illustrated, the group has edged atop trendline resistance, a level closely matching the 50-day moving average, currently 187.60.

The slight breakout originates from major support.

To be sure, the prevailing upturn has been fueled by lackluster volume, placing its sustainability in question.

Nonetheless, the 50-day has marked an inflection point, effectively capping the transports since the February breakdown. The group’s recovery attempt is guardedly intact barring a violation.

Similarly, transports bellwether FedEx Corp’s FDX, +0.47%  backdrop closely matches that of the sector.

Here again, the group has rallied from support closely matching the 200-day moving average, rising atop trendline resistance.

The trendline, circa 244, pivots to support, and the rally attempt is intact barring a violation.

Initially profiled March 8, Intel Corp. INTC, +2.14%  has edged slightly higher and remains well positioned. (Yield = 2.3%.)

As illustrated, the shares have rallied to the range top, amid a volatile market, rising to challenge their best level since September 2000. Intel’s 17-year closing peak (52.72) and absolute peak (53.78) are currently under siege.

The prevailing upturn originates from major support, and a near-term target projects to the 58.50 area on follow-through.

Caterpillar, Inc. CAT, +1.39%  is a Dow 30 component showing signs of life. (Yield = 2.1%.)

Technically, the shares have edged atop trendline resistance, rising to challenge the 50-day moving average, currently 151.95.

Underlying the upturn, its relative strength index (not illustrated) has registered six-week highs, but remains in neutral territory, improving the chances of follow-through.

The trendline pivots to support, circa 149, and a breakout attempt is in play barring a violation.

Note that the company is scheduled to report its quarterly results on April 24.

Five Below, Inc. FIVE, -0.13%  is a well positioned mid-cap specialty retailer.

As illustrated, the shares have recently staged a strong-volume breakout, rising from trendline support to record territory.

The subsequent pullback has been flat, fueled by decreased volume, positioning the shares to extend the uptrend. Tactically, first support matches the breakout point (73.50) and is followed by the trendline, circa 71.50.

Five Below will be added to the S&P MidCap 400 before the open on Thursday, April 19.

Pacira Pharmaceuticals, Inc. PCRX, +0.56%  is a mid-cap name coming to life.

Earlier this month, the shares knifed sharply higher, rising after the FDA approved expanded use for the company’s opioid-free pain management treatment.

The breakout signals a trend shift.

Tactically, the post-breakout low closely matches the 50-day moving average, currently 32.75, and the rally attempt is intact 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
Intercept Pharmaceuticals Inc. ICPT Apr. 16
Barrick Gold Corp. ABX Apr. 16
Valero Energy VLO Apr. 16
EOG Resources, Inc. EOG Apr. 11
Sarepta Therapeutics, Inc. SRPT Apr. 11
Autodesk, Inc. ADSK Apr. 10
Intrexon Corp. XON Apr. 10
NetApp, Inc. NTAP Apr. 9
GlaxoSmithKline GSK Apr. 9
AMC Entertainment Holdings, Inc. AMC Apr. 9
Lands’ End, Inc. LE Apr. 5
American Eagle Outfitters, Inc. AEO Apr. 5
Guess, Inc. GES Apr. 2
Continental Resources, Inc. CLR Apr. 2
Whiting Petroleum Corp. WLL Mar. 22
Old Dominion Freight Line, Inc. ODFL Mar. 21
Domino’s Pizza, Inc. DPZ Mar. 21
Orbotech Ltd. ORBK Mar. 16
Eastman Chemical Co. EMN Mar. 16
Veeva Systems, Inc. VEEV Mar. 15
Dillard’s, Inc. DDS Mar. 15
Autohome, Inc. ATHM Mar. 14
Burlington Stores, Inc. BURL Mar. 14
Baozun, Inc. BZUN Mar. 9
Marathon Petroleum Corp. MPC Mar. 9
Intel Corp. INTC Mar. 8
AxoGen, Inc. AXGN Mar. 8
Zebra Technologies Corp. ZBRA Mar. 7
TJX Companies, Inc. TJX Mar. 6
Chart Industries, Inc. GTLS Mar. 6
Micron Technology, Inc. MU Mar. 5
Macy’s, Inc. M Mar. 5
Five9, Inc. FIVN Mar. 5
LivePerson, Inc. LPSN Feb. 28
Apple, Inc. AAPL Feb. 26
VeriSign, Inc. VRSN Feb. 26
Shutterfly, Inc. SFLY Feb. 22
ServiceNow, Inc. NOW Feb. 21
Palo Alto Networks, Inc. PANW Feb. 16
Adobe Systems, Inc. ADBE Feb. 16
Varian Medical Systems, Inc. VAR Feb. 15
Salesforce.com, Inc. CRM Feb. 12
ASML Holding N.V. ASML Feb. 12
Red Hat, Inc. RHT Feb. 1
iShares Latin American 40 ETF ILF Jan. 30
Fortinet, Inc. FTNT Jan 19
Insulet Corp. PODD Jan. 17
Arrowhead Pharmaceuticals Corp. ARWR Jan. 11
Vericel Corp. VCEL Jan. 10
Sarepta Therapeutics, Inc. SRPT Jan. 3
SPDR Gold Trust GLD Jan. 2
Seagate Technology STX Dec. 13
Best Buy Co. BBY Dec. 11
Abercrombie & Fitch Co. ANF Nov. 20
MSCI, Inc. MSCI Nov. 20
Motorola Solutions, Inc. MSI Nov. 14
Splunk, Inc. SPLK Nov. 9
Akamai Technologies, Inc. AKAM Oct. 30
Lululemon Athletica, Inc. LULU Oct. 24
HubSpot, Inc. HUBS Oct. 4
XPO Logistics, Inc. XPO Oct. 2
Nvidia Corp. NVDA Sept. 27
Southern Copper Corp. SCCO Aug. 17
Bottomline Technologies, Inc. EPAY July 13
Weibo Corp. WB May 12
GrubHub, Inc. GRUB May 4
Square, Inc. SQ Mar. 3
Paycom Software, Inc. PAYC Feb. 24
Netflix, Inc. NFLX Oct. 4
Microsoft Corp. MSFT Aug. 5
VanEck Vectors Semiconductor ETF SMH June 23
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