Technically speaking, the major U.S. stock benchmarks are starting 2018 against a firmly-bullish bigger-picture backdrop.
On a headline basis, each big three benchmark — the S&P 500, Dow industrials and Nasdaq Composite — has sustained the decisive late-2017 technical breakout, and remains within striking distance of yet another record high.
Before detailing the U.S. markets’ wider view, the S&P 500’s
hourly chart highlights the past two weeks.
As illustrated, the S&P concluded 2017 amid a tight two-week range, spanning about 21 points, or less than 0.8%.
Tactically, the range top (2,695) defines the S&P’s record high, while the range bottom closely matches near-term support (2,672).
Similarly, the Dow Jones Industrial Average has asserted a range-bound posture.
Its corresponding range spans about 170 points, or less than 0.7%.
Here again, the range top (24,876) defines the Dow’s all-time high, while near-term support matches the range bottom.
Meanwhile, the Nasdaq Composite’s near-term backdrop remains slightly softer.
Consider that near-term resistance (6,955) matches last week’s high, also three consecutive session highs.
The ensuing downturn placed the Nasdaq at two-week lows, via a final-hour 2017 downturn.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq’s late-year downturn registers as technically tame. The 2017 close (6,903) closely matched the breakout point and the 20-day moving average.
Delving deeper, trendline support, circa 6,850, has defined the prevailing uptrend. The Nasdaq’s intermediate-term bias points firmly higher barring a violation.
Looking elsewhere, the Dow Jones Industrial Average is digesting the late-2017 breakout.
Recall that the November rally was statistically unusual, encompassing five consecutive closes atop the 20-day volatility bands. Put differently, this was a two standard deviation breakout.
The prevailing upturn closely resembles the mid-September breakout (also precisely five closes atop the bands) and subsequent follow-through.
Similarly, the S&P 500 has flatlined of late, digesting the steep late-year rally.
Consider that the 2017 peak (2,695) registered slightly under its projected technical target of 2,705.
The bigger picture
Broadly speaking, the major U.S. benchmarks are starting 2018 against a bullish technical backdrop.
Though each index has pulled in from record territory, the selling pressure remains flat, and limited technical damage has been inflicted.
Moving to the small-caps, the iShares Russell 2000 ETF
is traversing a five-week range.
Major support matches the breakout point (150.50) and the 50-day moving average, currently 150.40.
Conversely, the range top matches the small-cap benchmark’s all-time high. The tight late-year range just under record territory is technically constructive.
Meanwhile, the S&P MidCap 400 is digesting a slightly more decisive late-2017 breakout.
Here again, the tight two-week range, just under all-time highs, improves the chances of follow-through. Tactically, near-term support (340.40) is closely followed by the 50-day moving average.
Against this backdrop, the SPDR Trust S&P 500 is holding tightly to record territory amid decreased volume. It continues to trend atop the 20-day moving average, currently 266.30.
Summing up the backdrop
Collectively, the U.S. benchmarks have asserted a firmly-bullish technical bias against the backdrop of grinding-higher price action.
Moreover, healthy sector rotation continues to underpin the prevailing uptrend, even amid 2017’s lackluster final weeks. (See the Dec. 21 review.)
Tactically, the S&P 500 has held relatively tightly to record highs, and remains within striking distance of the 2,705 target.
Conversely, the 20-day moving average, currently 2,667, is rising toward near-term support (2,672), illustrated on the hourly chart. The S&P has registered just one close under the 20-day since Aug. 29, and its near-term uptrend is firmly intact barring a violation.
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 United States Oil Fund
has extended its uptrend, rising amid heightened geopolitical tensions. The fund tracks the price of West Texas Intermediate (WTI) light, sweet crude oil.
Technically, the USO has confirmed its uptrend, rising to 18-month highs from trendline support. The former range top (11.79) pivots to well-defined support.
More broadly, the shares are within striking distance of major overhead (12.45), an area matching a two-year range top. An eventual breakout opens the path to less-charted territory, and potentially material follow-through.
Amid rising oil prices, the VanEck Vectors Oil Services ETF is acting well technically.
Late last month, the group rallied to the range top, edging above the 200-day moving average, currently 25.60.
The ensuing pullback has been flat, underpinned by the 200-day, positioning the group for a potential breakout.
More broadly, the range top matches a multi-year inflection point, illustrated on the two-year chart. A breakout opens the path to less-charted territory, and potentially material follow-through.
Looking elsewhere, the SPDR Gold Trust
has also come to life technically.
As illustrated, the shares staged a late-December resurgence, knifing atop trendline resistance, as well as the 50- and 200-day moving averages.
In the process, the GLD tagged a fractional three-month peak to conclude 2017.
Tactically, trendline support closely matches the major moving averages, circa 121, and the rally attempt is intact barring a violation.
Moving to specific names, Hovnanian Enterprises, Inc.
is a well positioned small-cap homebuilder.
Technically, the shares have launched to two-year highs, rising from a cup-and-handle defined by the September and December lows. Recent strength punctuates a successful test of the 50-day moving average.
Though near-term extended, and due to consolidate, the shares are attractive on a pullback. Well-defined support matches the breakout point, circa 3.00.
More broadly, the shares are traversing less-charted territory, illustrated on the four-year chart, opening the path to potentially material longer-term follow-through.
is a mid-cap developer of computer-vision, audio and semiconductor technologies.
As illustrated, the shares have recently knifed atop trendline resistance, and the major moving averages, rising amid a sustained volume increase.
The ensuing pullback has been flat, fueled by decreased volume, placing the shares at an attractive entry near support, and 16% under the December peak.
Profiled Oct. 2, Neurocrine Biosciences, Inc.
has returned 24.4% and remains well positioned.
The shares initially spiked two months ago, gapping higher after the company’s third-quarter results.
The ensuing pullback has been underpinned by the top of the gap, and the 50-day moving average, an area defining the prevailing uptrend.
More broadly, the shares are well positioned the three-year chart, rising from a flag-like pattern pinned to the initial October spike. Tactically, well-defined support matches the breakout point, circa 75.50.
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.
|Under Armor, Inc.||UA||Dec. 21|
|Vale S.A.||VALE||Dec. 21|
|Proteostasis Therapeutics, Inc.||PTI||Dec. 21|
|Finisar Corp.||FNSR||Dec. 20|
|Pioneer Natural Resources Co.||PXD||Dec. 20|
|Nucor Corp.||NUE||Dec. 20|
|Westport Fuel Systems, Inc.||WPRT||Dec. 20|
|Zions Bancorp||ZION||Dec. 20|
|Intel Corp.||INTC||Dec. 19|
|BB&T Corp.||BBT||Dec. 19|
|Ubiquiti Networks, Inc.||UBNT||Dec. 19|
|McDonald’s Corp.||MCD||Dec. 18|
|Silicon Motion Technology Corp.||SIMO||Dec. 18|
|SPDR S&P Aerospace & Defense ETF||XAR||Dec. 18|
|Century Aluminum Co.||CENX||Dec. 18|
|Prosperity Bancshares, Inc.||PB||Dec. 18|
|NuVasive, Inc.||NUVA||Dec. 18|
|SPDR S&P Metals & Mining ETF||XME||Dec. 14|
|Blueprint Medicines Corp.||BPMC||Dec. 14|
|Dunkin’ Brands Group, Inc.||DNKN||Dec. 14|
|JD.com, Inc.||JD||Dec. 14|
|Seagate Technology||STX||Dec. 13|
|TJX Companies, Inc.||TJX||Dec. 13|
|Consumer Staples Select Sector SPDR||XLP||Dec. 12|
|Nordstrom, Inc.||JWN||Dec. 12|
|VeriSign, Inc.||VRSN||Dec. 12|
|Catalyst Pharmaceuticals, Inc.||CPRX||Dec. 12|
|F5 Networks, Inc.||FFIV||Dec. 11|
|Best Buy Co.||BBY||Dec. 11|
|Lowe’s Companies, Inc.||LOW||Dec. 11|
|PNC Financial Services Group, Inc.||PNC||Dec. 11|
|Bank of America Corp.||BAC||Dec. 8|
|Verizon Communications, Inc.||VZ||Dec. 7|
|Regions Financial Corp.||RF||Dec. 7|
|Kohl’s Corp.||KSS||Dec. 6|
|CNX Resourcers Corp.||CNX||Dec. 6|
|Norfolk Southern Corp.||NSC||Dec. 4|
|Medtronic plc||MDT||Dec. 4|
|East West Bancorp, Inc.||EWBC||Dec. 4|
|Caterpillar, Inc.||CAT||Dec. 1|
|Kulicke and Soffa Industries, Inc.||KLIC||Dec. 1|
|iShares Transportation Average ETF||IYT||Nov. 30|
|SPDR S&P Regional Banking ETF||KRE||Nov. 29|
|Macy’s, Inc.||M||Nov. 29|
|Copa Holdings, S.A.||CPA||Nov. 29|
|International Game Technology||IGT||Nov. 29|
|Loews Corp.||L||Nov. 29|
|Nuance Communications, Inc.||NUAN||Nov. 28|
|NetEase, Inc.||NTES||Nov. 27|
|Advance Auto Parts, Inc.||AAP||Nov. 27|
|AutoNation, Inc.||AN||Nov. 27|
|Walt Disney Co.||DIS||Nov. 22|
|FleetCor Technologies, Inc.||FLT||Nov. 21|
|SPDR S&P Retail ETF||XRT||Nov. 20|
|Abercrombie & Fitch Co.||ANF||Nov. 20|
|American Eagle Outfitters, Inc.||AEO||Nov. 20|
|MSCI, Inc.||MSCI||Nov. 20|
|Verisk Analytics, Inc.||VRSK||Nov. 20|
|Halozyme Therapeutics, Inc.||HALO||Nov. 16|
|SkyWest, Inc.||SKYW||Nov. 16|
|Consumer Discretionary SPDR||XLY||Nov. 14|
|Motorola Solutions, Inc.||MSI||Nov. 14|
|Skechers U.S.A., Inc.||SKX||Nov. 13|
|Polaris Industries, Inc.||PII||Nov. 13|
|Tractor Supply Co.||TSCO||Nov. 13|
|Splunk, Inc.||SPLK||Nov. 9|
|Aimmune Therapeutics, Inc.||AIMT||Nov. 9|
|Teradata Corp.||TDC||Nov. 7|
|Corning, Inc.||GLW||Nov. 7|
|InterXion Holding, N.V.||INXN||Nov. 6|
|Yum Brands, Inc.||YUM||Nov. 6|
|First Solar, Inc.||FSLR||Nov. 3|
|Twitter, Inc.||TWTR||Nov. 1|
|Ambarella, Inc.||AMBA||Nov. 1|
|Melco Resorts & Entertainment Limited||MLCO||Nov. 1|
|Broadcom Limited||AVGO||Oct. 31|
|Akamai Technologies, Inc.||AKAM||Oct. 30|
|Cisco Systems, Inc.||CSCO||Oct. 25|
|Mosaic Co.||MOS||Oct. 25|
|Builders FirstSource, Inc.||BLDR||Oct. 25|
|Marvell Technology Group, Ltd.||MRVL||Oct. 24|
|Lululemon Athletica, Inc.||LULU||Oct. 24|
|PPG Industries, Inc.||PPG||Oct. 23|
|SPDR S&P Homebuilders ETF||XHB||Oct. 20|
|Travelers Companies, Inc.||TRV||Oct. 20|
|Johnson & Johnson||JNJ||Oct. 20|
|Steel Dynamics, Inc.||STLD||Oct. 20|
|Michael Kors Holdings Limited||KORS||Oct. 18|
|Marathon Oil Corp.||MRO||Oct. 17|
|SM Energy Co.||SM||Oct. 16|
|Nutanix, Inc.||NTNX||Oct. 16|
|Dollar General||DG||Oct. 16|
|Paychex, Inc.||PAYX||Oct. 13|
|Union Pacific Corp.||UNP||Oct. 12|
|International Business Machines Corp.||IBM||Oct. 11|
|Ford Motor Co.||F||Oct. 11|
|3M Co.||MMM||Oct. 5|
|LGI Homes, Inc.||LGIH||Oct. 5|
|HubSpot, Inc.||HUBS||Oct. 4|
|SolarEdge Technologies, Inc.||SEDG||Oct. 4|
|Intel Corp.||INTC||Oct. 3|
|Citrix Systems, Inc.||CTXS||Oct. 3|
|XPO Logistics, Inc.||XPO||Oct. 2|
|EOG Resources, Inc.||EOG||Oct. 2|
|Neurocrine Biosciences, Inc.||NBIX||Oct. 2|
|FedEx Corp.||FDX||Sept. 29|
|YY, Inc.||YY||Sept. 29|
|Nvidia Corp.||NVDA||Sept. 27|
|Financial Select Sector SPDR||XLF||Sept. 26|
|Texas Instruments, Inc.||TXN||Sept. 20|
|Continential Resources, Inc.||CLR||Sept. 18|
|Silicon Laboratories, Inc.||SLAB||Sep. 15|
|Devon Energy Corp.||DVN||Sep. 15|
|Energy Select Sector SPDR||XLE||Sept. 14|
|Cimarex Energy Co.||XEC||Sept. 14|
|Urban Outfitters, Inc.||URBN||Sept. 14|
|Valero Energy Corp.||VLO||Sept. 11|
|Home Depot, Inc.||HD||Sept. 7|
|Ross Stores, Inc.||ROST||Sept. 7|
|Wal-Mart Stores, Inc.||WMT||Sept. 6|
|Tower Semiconductor, Ltd.||TSEM||Aug. 24|
|Southern Copper Corp.||SCCO||Aug. 17|
|Boingo Wireless, Inc.||WIFI||Aug. 16|
|Cadence Design Systems, Inc.||CDNS||Aug. 4|
|Abbott Laboratories||ABT||Aug. 3|
|SBA Communications Corp.||SBAC||July 20|
|D.R. Horton, Inc.||DHI||July 18|
|Bottomline Technologies, Inc.||EPAY||July 13|
|Toyota Motor Corp.||TM||July 13|
|PulteGroup, Inc.||PHM||July 11|
|Scientific Games Corp.||SGMS||June 7|
|iShares China Large-Cap ETF||FXI||June 6|
|Health Care Select Sector SPDR||XLV||June 5|
|Sangamo Therapeutics, Inc.||SGMO||June 5|
|Monster Beverage Corp.||MNST||May 24|
|FMC Corp.||FMC||May 16|
|iShares MSCI Japan ETF||EWJ||May 12|
|Weibo Corp.||WB||May 12|
|GrubHub, Inc.||GRUB||May 4|
|Caterpillar, Inc.||CAT||Apr. 28|
|UnitedHealth Group, Inc.||UNH||Mar. 31|
|iShares MSCI Hong Kong ETF||EWH||Mar. 24|
|Universal Display Corp.||OLED||Mar. 21|
|iShares MSCI Asia ex Japan ETF||AAXJ||Mar. 21|
|Square, Inc.||SQ||Mar. 3|
|Paycom Software, Inc.||PAYC||Feb. 24|
|Facebook, Inc.||FB||Feb. 23|
|SPDR S&P Biotech ETF||XBI||Feb. 15|
|CBOE Holdings, Inc.||CBOE||Feb. 8|
|Boeing Co.||BA||Feb. 7|
|Exact Sciences Corp.||EXAS||Jan. 30|
|iShares Europe ETF||IEV||Jan. 26|
|iShares MSCI Emerging Markets ETF||EEM||Jan. 11|
|Alphabet, Inc.||GOOGL||Jan. 9|
|Alibaba Group Holding Limited||BABA||Jan. 5|
|Apple, Inc.||AAPL||Dec. 9|
|Technology Select Sector SPDR||XLK||Oct. 25|
|Netflix, Inc.||NFLX||Oct. 4|
|Microsoft Corp.||MSFT||Aug. 5|
|PowerShares QQQ ETF||QQQ||July 19|
|Industrial Select Sector SPDR||XLI||July 15|
|Materials Select Sector SPDR||XLB||July 15|
|VanEck Vectors Semiconductor ETF||SMH||June 23|