Charting a bullish July start, Nasdaq extends break to record territory
- 7th July 2020
- Posted by: Hakeem
- Category: Stock
Technically speaking, the major U.S. benchmarks are off to a constructive July start despite persistently uneven bigger-picture price action.
On a headline basis, the S&P 500 has reclaimed major resistance (3,155) — rising to fill the June gap — while the Nasdaq Composite extends a more decisive July break to previously uncharted territory.
Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, -0.20% hourly chart highlights the past two weeks.
As illustrated, the S&P has reclaimed major resistance (3,155), a level matching the November peak (3,154). This area pivots to first support.
Separately, the index has effectively nailed additional overhead at the top of the June gap (3,181.5). Recall that a close atop gap resistance would neutralize the early-June island reversal.
Meanwhile, the Dow Jones Industrial Average DJIA, -0.77% has nailed its range top, an area matching the early-June gap (26,294).
Monday’s high (26,297) and the session close (26,287) registered nearby.
Separately, the blue-chip benchmark continues to challenge its 200-day moving average, currently 26,245. The prevailing retest is also detailed on the daily chart.
Not surprisingly, the Nasdaq Composite COMP, 0.31% remains the strongest major benchmark.
As illustrated, the index has extended a decisive break to record territory.
The prevailing upturn punctuates a jagged test of the breakout point (9,838) an area better illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has knifed to record territory, rising from a jagged retest of the breakout point (9,838).
Though near-term extended, and due to consolidate, the nearly straightline July start is longer-term bullish.
Overhead targets continue to project to the 10,505 and 10,610 areas, and are firmly within view.
Looking elsewhere, the Dow Jones Industrial Average remains range-bound amid a persistently weaker backdrop.
Still, the index has maintained a posture atop its 50-day moving average, a level that has underpinned the May and June lows.
Conversely, the 200-day moving average, currently 26,245, has marked an overhead sticking point. Though Monday’s close (26,287) marked the Dow’s first close higher since June 10, an extended retest remains underway.
Separately, the week-to-date peak (26,297) has matched gap resistance (26,294). Follow-through atop this area would mark technical progress.
Meanwhile, the S&P 500 has rallied atop major resistance (3,154), notching its first close higher since June 10.
Separately, the prevailing upturn has tagged the top of the June gap (3,181.5).
The early-week peak (3,182.6) has effectively matched gap resistance.
On further strength, more distant overhead matches the 2019 close (3,230) and the June peak (3,233).
The bigger picture
As detailed above, the major U.S. benchmarks are off to a constructive July start.
On a headline basis, the Nasdaq Composite has knifed decisively to record territory. Meanwhile, the S&P 500 and Dow industrials continue to broadly trend higher, though less aggressively.
Each benchmark’s intermediate-term bias remains bullish.
Moving to the small-caps, the iShares Russell 2000 ETF has maintained major support.
Tactically, its trendline tracks the 50-day moving average, currently 137.00, a level that has surpassed the breakout point (136.20).
Conversely, the small-cap benchmark remains capped by its 200-day moving average, currently 146.34.
More broadly, the prevailing backdrop is, perhaps strangely, not too different than that of the Dow industrials, a benchmark representing 30 of the largest U.S. companies.
Similarly, the SPDR S&P MidCap 400 ETF has maintained major support roughly matching the 50-day moving average.
But here again, the MDY remains capped by its 200-day moving average, currently 335.12.
Looking elsewhere, the SPDR Trust S&P 500 has rallied from a jagged test of its 200-day moving average.
The prevailing upturn places it slightly atop gap resistance (313.00). Monday’s close marked the SPY’s first close higher since early June.
Placing a finer point on the S&P 500, the index has reclaimed major resistance (3,155).
Monday’s session low (3,155) matched the inflection point to punctuate the initial breakout.
More broadly, the prevailing upturn originates from the 3,000 mark, as well as a jagged test of the 200-day moving average.
Conversely, the early-July peak (3,182) has matched the top of the June gap (3,181.5).
Follow-through atop gap resistance would neutralize the early-June bearish island reversal. (But also note that the S&P has sustained its recovery attempt, in the broad sweep, partly defined by a series of ”higher lows” and “higher highs.” The island reversal neglected to follow-through lower after the initial early-June downdraft.)
On further strength, more distant overhead matches the 2019 close (3,230) and June peak (3,233).
Separately, the S&P’s 50-day moving average, currently 3,018, is rising toward the 200-day moving average, currently 3,024, amid a pending golden cross. Though often a lagging indicator, the crossover will likely signal mid-week.
Beyond specific levels, the S&P 500’s prevailing backdrop continues to support a bullish intermediate- to longer-term bias.
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.
Initially profiled March 19, the iShares MSCI Emerging Markets ETF EEM, -1.21% has returned 38.6% and remains well positioned. (Yield = 2.9%.)
Technically, the shares have knifed to four-month highs, rising in sympathy with China’s early-week breakout.
Though near-term extended, and due to consolidate, the decisive triangle breakout signals a primary trend shift. Tactically, trendline support closely matches the 200-day moving average, currently 40.52. A sustained posture higher signals a firmly-bullish bias.
Moving to U.S. sectors, the VanEck Vectors Semiconductor ETF SMH, -0.22% is acting well technically.
As illustrated, the group has reached record highs, rising from a tight three-week range. A near-term target projects to the 164 area on follow-through.
Conversely, trendline support closely matches the breakout point, circa 153.50, and is followed by the former range bottom (142.30). The prevailing rally attempt is intact barring a violation.
Analog Devices, Inc. ADI, 0.26% is a well positioned large-cap semiconductor name. (Yield = 2.0%.)
As illustrated, the shares are pressing well-defined resistance matching record territory. The prevailing five-week range is a bullish continuation pattern, hinged to the steep early-June rally.
Tactically, trendline support is followed by the range bottom (115.10) and a breakout attempt is in play barring a violation.
Initially profiled May 8, Salesforce.com, Inc. CRM, 1.01% has returned 12.4% and remains well positioned.
Technically, the shares have staged a bull-flag breakout, reaching record highs from a tight late-June range. A near-term target projects to the 202 area on follow-through.
Conversely, the breakout point (194.00) is followed by trendline support. A sustained posture higher signals a firmly-bullish bias.
Finally, FedEx Corp. FDX, 1.40% is a large-cap transportation bellwether coming to life.
The shares started July with a massive gap atop the 200-day moving average, rising after the company’s well received quarterly results.
Though still near-term extended, the strong-volume spike is longer-term bullish, and the shares are attractive on a pullback. Tactically, the June peak (150.00) is followed by a firmer floor matching the bottom of the gap (140.75) and the 200-day moving average, currently 140.82.
Editor’s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.
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|
|Akamai Technologies, Inc.||AKAM||July 6|
|Verisk Analytics, Inc.||VRSK||July 6|
|Big Lots, Inc.||BIG||July 1|
|Tandem Diabetes Care, Inc.||TNDM||July 1|
|Boeing Co.||BA||June 30|
|Dell Technologies, Inc.||DELL||June 30|
|Zebra Technologies Corp.||ZBRA||June 30|
|Box, Inc.||BOX||June 29|
|Yeti Holdings, Inc.||YETI||June 25|
|Arrowhead Pharmaceuticals, Inc.||ARWR||June 25|
|Danaher Corp.||DHR||June 24|
|Hologic, Inc.||HOLX||June 23|
|First Solar, Inc.||FSLR||June 22|
|Momenta Pharmaceuticals, Inc.||MNTA||June 22|
|SPDR S&P Biotech ETF||XBI||June 19|
|Lowe’s Companies||LOW||June 19|
|Fiverr International, Ltd.||FVRR||June 19|
|Chegg, Inc.||CHGG||June 18|
|Fastly, Inc.||FSLY||June 18|
|Arena Pharmaceuticals, Inc.||ARNA||June 18|
|Etsy, Inc.||ETSY||June 17|
|Skyworks Solutions, Inc.||SWKS||June 16|
|Lululemon Athletica, Inc.||LULU||June 16|
|Carvana Co.||CVNA||June 10|
|Williams-Sonoma, Inc.||WSM||June 9|
|HubSpot, Inc.||HUBS||June 8|
|Square, Inc.||SQ||June 8|
|United Parcel Service, Inc.||UPS||June 5|
|Micron Technology, Inc.||MU||June 5|
|Xilinx, Inc.||XLNX||June 4|
|KLA Corp.||KLAC||June 4|
|VMware, Inc.||VMW||June 3|
|FedEx Corp.||FDX||June 3|
|SPDR S&P Retail ETF||XRT||June 3|
|ASML Holding N.V.||ASML||June 1|
|Datadog, Inc.||DDOG||June 1|
|iShares MSCI Japan ETF||EWJ||May 29|
|SolarEdge Technologies, Inc.||SEDG||May 29|
|Splunk, Inc.||SPLK||May 28|
|Microchip Technology, Inc.||MCHP||May 27|
|Synopsis, Inc.||SNPS||May 27|
|SSR Mining, Inc.||SSRM||May 27|
|Twilio, Inc.||TWLO||May 26|
|Take-Two Interactive Software, Inc.||TTWO||May 26|
|Lam Research Corp.||LRCX||May 26|
|Marvell Technology Group, Ltd.||MRVL||May 26|
|Cisco Systems, Inc.||CSCO||May 21|
|Beyond Meat, Inc.||BYND||May 21|
|Agios Pharmaceuticals, Inc.||AGIO||May 20|
|Cree, Inc.||CREE||May 20|
|Applied Materials, Inc.||AMAT||May 19|
|Fortinet, Inc.||FTNT||May 18|
|Alteryx, Inc.||AYX||May 18|
|iShares Silver Trust||SLV||May 15|
|Agnico Eagle Mines, Ltd.||AEM||May 15|
|Agilent Technologies, Inc.||A||May 15|
|Halozyme Therapeutics, Inc.||HALO||May 15|
|Wix.com, Ltd.||WIX||May 13|
|Extreme Networks, Inc.||EXTR||May 13|
|Qualcomm, Inc.||QCOM||May 12|
|Zynga, Inc.||ZNGA||May 12|
|Kinross Gold Corp.||KGC||May 11|
|Avalara, Inc.||AVLR||May 8|
|Salesforce.com, Inc.||CRM||May 8|
|Facebook, Inc.||FB||May 7|
|Spotify Technology S.A.||SPOT||May 5|
|CrowdStrike Holdings, Inc.||CRWD||May 4|
|iRobot Corp.||IRBT||May 4|
|Inphi Corp.||IPHI||Apr. 29|
|Qorvo, Inc.||QRVO||Apr. 29|
|Old Dominion Freight Line, Inc.||ODFL||Apr. 29|
|Dollar General Corp.||DG||Apr. 28|
|AngloGold Ashanti Ltd.||AU||Apr. 28|
|Cadence Design Systems, Inc.||CDNS||Apr. 27|
|ServiceNow, Inc.||NOW||Apr. 27|
|Snap, Inc.||SNAP||Apr. 27|
|Five9, Inc.||FIVN||Apr. 24|
|Chewy, Inc.||CHWY||Apr. 24|
|Tesla, Inc.||TSLA||Apr. 23|
|Shopify, Inc.||SHOP||Apr. 23|
|iShares Nasdaq Biotechnology ETF||IBB||Apr. 21|
|Teradyne, Inc.||TER||Apr. 20|
|Electronic Arts, Inc.||EA||Apr. 20|
|VanEck Vectors Semiconductor ETF||SMH||Apr. 17|
|Coupa Software, Inc.||COUP||Apr. 17|
|Veeva Systems, Inc.||VEEV||Apr. 17|
|American Tower Corp.||AMT||Apr. 17|
|Okta, Inc.||OKTA||Apr. 16|
|Target Corp.||TGT||Apr. 16|
|Netflix, Inc.||NFLX||Apr. 14|
|VanEck Vectors Gold Miners ETF||GDX||Apr. 14|
|Invesco QQQ Trust||QQQ||Apr. 14|
|Ciena Corp.||CIEN||Apr. 6|
|Seattle Genetics, Inc.||SGEN||Apr. 6|
|DocuSign, Inc.||DOCU||Apr. 3|
|Zscaler, Inc.||ZS||Apr. 3|
|RingCentral, Inc.||RNG||Mar. 30|
|Activision Blizzard, Inc.||ATVI||Mar. 30|
|Regeneron Pharmaceuticals, Inc.||REGN||Mar. 30|
|Apple, Inc.||AAPL||Mar. 27|
|Nvidia Corp.||NVDA||Mar. 27|
|Dexcom, Inc.||DXCM||Mar. 27|
|Amazon.com, Inc.||AMZN||Mar. 26|
|Stamps.com, Inc.||STMP||Mar. 26|
|Quidel Corp.||QDEL||Mar. 26|
|Domino’s Pizza, Inc.||DPZ||Mar. 20|
|Kroger Co.||KR||Mar. 19|
|Zoom Video Communications, Inc.||ZM||Mar. 19|
|iShares MSCI Emerging Markets ETF||EEM||Mar. 19|
|Newmont Corp.||NEM||Jan. 13|
|Atlassian Corp.||TEAM||Jan. 7|
|SPDR Gold Shares ETF||GLD||Jan. 2|
|Teledoc Health, Inc.||TDOC||Nov. 1|
|Microsoft Corp.||MSFT||Feb. 22|
|* Click each symbol for current chart.|