January breakout accelerates, S&P 500 clears 20-day volatility bands

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Technically speaking, the major U.S. stock benchmarks have registered massive breakouts to start the new year.

In the process, each index has confirmed its primary uptrend against the backdrop of persistently extreme bullish momentum.





Before detailing the U.S. markets’ wider view, the S&P 500’s












SPX, +0.16%










 hourly chart highlights the past two weeks.

As illustrated, the S&P continues to take flight.

Tactically, near-term support (2,759) is followed by a firmer floor, circa 2,740, an area closely matching last week’s low.



Similarly, the Dow Jones Industrial Average has extended its breakout.

Here again, near-term support remains poorly-defined. A near-term floor (25,440) is followed by an inflection point just under the 25,300 mark.



Against this backdrop, the Nasdaq Composite is also trending firmly higher.

In its case, first support (7,181) is followed by a firmer floor matching last week’s low (7,111).



Widening the view to six months adds perspective.

On this wider view, the Nasdaq has knifed to all-time highs, confirming its primary uptrend. Though near-term extended, the straightline spike is longer-term bullish.

Tactically, the ascending 20-day moving average, currently 7,052, is followed by the breakout point, the 2017 peak of 7,004.



Looking elsewhere, the Dow Jones Industrial Average has also knifed to uncharted territory.

The breakout punctuates a bull flag, a continuation pattern, defined by the tight late-December range.

More immediately, the Dow has tagged the 26,000 mark early Tuesday, just seven sessions after reaching Dow 25,000. This marks its fastest-ever rally between round-number milestones, eclipsing the previous record of 23 sessions.



Perhaps not surprisingly, the S&P 500 is also refusing to pull in.

Recall that the S&P has registered just one close under its 20-day moving average since Aug. 29, signaling a strong near-term uptrend.

The bigger picture

Broadly speaking, the major U.S. benchmarks have taken flight to start 2018.

On a headline basis, each index has reached record territory, in statistically unusual form, confirming its primary uptrend.



Moving to the small-caps, the iShares Russell 2000 ETF has belatedly broken out.

Its previously tight January range, amid strength elsewhere, positioned the small-cap benchmark for potential follow-through. The former range top, circa 155.50, pivots to support.

Separately, the prevailing breakout registers as statistically extreme. The IWM has notched consecutive closes atop the 20-day volatility bands.



Meanwhile, the S&P MidCap 400 has extended the January rally. Tactically, the breakout point, circa 349.20, remains the MDY’s first notable floor.



Against this backdrop, it’s worth quantifying the S&P 500’s unusually bullish 2018 start. The chart above includes the 20-day Bollinger bands, also known as volatility bands.

Illustrated in red, the bands encompass two standard deviations of the S&P’s trailing 20-day volatility.

Consider that the S&P has closed atop the bands on five of the prior seven sessions, signaling an increasingly familiar tension between time horizons.

For the near-term, the S&P 500 is extended, and due consolidate.

But more importantly, bullish momentum continues to register as extreme, likely laying the groundwork for longer-term follow-through. Put differently, the strong 2018 start registers as a sustained two standard deviation breakout.

(The Dow Jones Industrial Average has also notched five closes atop the bands, over the prior seven sessions, though not the same five sessions as the S&P 500.)

Tactically, near-term S&P 500 support holds around 2,740, an area that underpinned the first modest 2018 pullback.

Delving deeper, the S&P’s 20-day moving average, currently 2,714, is followed by the breakout point, the 2017 peak of 2,695. Though a cooling-off period is overdue, the S&P 500’s near-term bias points higher barring a violation.

See also: Charting a bull-trend breakout, S&P 500 reaches ‘clear skies’ territory.

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 U.S. dollar is off to a bearish 2018 start.

As illustrated, the PowerShares U.S. Dollar Bullish ETF












UUP, -0.36%










has reached four-month lows, resolving a head-and-shoulders top defined by the October, November and December peaks.

Tactically, a reversal atop the neckline (24.00) would mark an early step toward stabilization.

Conversely, deeper support matches the September low (23.66) while a longer-term downside target projects to the 23.15 area, closely matching the 2012 peak.

Also see the Jan 3 review.



Conversely, the CurrencyShares Euro ETF












FXE, +0.43%










has taken flight. As always, the U.S. dollar and the euro are inversely correlated.

Technically, the shares have knifed to three-year highs, punctuating a successful test of trendline support.

The breakout point (116.40) pivots to well-defined support and is followed by the trendline circa 114.80. The euro’s technical bias points firmly higher barring a violation.



Initially profiled Jan. 13 — just over one year ago — Amazon.com, Inc.












AMZN, +1.10%










 has returned 59.7%.

As illustrated, the shares have knifed to uncharted territory to start 2018, also edging atop the 1,300 mark.

Though near-term extended, and due to consolidate, the nearly straightline January rally is longer-term bullish. Tactically, support broadly spans from about 1,232 to 1,253, the former matching last week’s low.



Blackberry Limited












BB, +3.88%










 is a well positioned large-cap name.

Earlier this month, the shares gapped to four-year highs, rising after the company announced a partnership with China-based Baidu, Inc. to develop autonomous vehicle technologies.

The ensuing pullback has been fueled by decreased volume, placing the shares 6.6% under the January peak. Tactically, the post-breakout closing low (13.45) offers an area from which to work, and a posture higher supports a bullish bias.

The shares are higher early Tuesday after the company’s launch of cybersecurity software for self-driving cars.



Maxim Integrated Products, Inc.












MXIM, -1.16%










  is a large-cap semiconductor name positioned to rise. (Yield = 2.7%.)

The shares initially spiked 10 weeks ago, gapping higher after the company’s quarterly results. The ensuing pullback has been underpinned by the top of the gap, and punctuated by the January lift to resistance.

Tactically, the range top, circa 55.40, matches 14-year highs. An intermediate-term target projects to the 60 area on a breakout.



Macy’s, Inc.












M, -1.32%










is a large-cap retailer coming to life.

As illustrated, the shares have established an orderly six-week range, digesting the late-year rally atop the 200-day moving average.

This is a continuation pattern, pinned to the steep November rally. A near-term target projects to the 30 area on follow-through.

Also consider that a golden cross, or bullish 50-day/200-day moving average crossover, has signaled early Tuesday. The intermediate-term uptrend has overtaken the longer-term trend.

More broadly, Macy’s is also well positioned on the two-year chart.

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
SPDR S&P Oil & Exploration and Production ETF XOP Jan. 12
Vuzix Corp. VUZI Jan. 12
ViewRay, Inc. VRAY Jan. 12
Delta Air Lines, Inc. DAL Jan. 12
American Airlines Group, Inc. AAL Jan. 11
Honeywell International, Inc. HON Jan. 11
Arrowhead Pharmaceuticals Corp. ARWR Jan. 11
Amgen, Inc. AMGN Jan. 10
Vericel Corp. VCEL Jan. 10
Ulta Beauty, Inc. ULTA Jan. 10
Universal Display Corp. OLED Jan. 9
Cheetah Mobile, Inc. CMCM Jan. 9
Alphabet, Inc. GOOGL Jan. 8
Sina Corp. SINA Jan. 8
Kandi Technologies Group, Inc. KNDI Jan. 8
KLA-Tencor Corp. KLAC Jan. 5
PVH Corp. PVH Jan. 5
General Motors Co. GM Jan. 5
International Business Machines Corp. IBM Jan. 4
Apache Corp. APA Jan. 4
International Paper Co. IP Jan. 3
Sarepta Therapeutics, Inc. SRPT Jan. 3
U.S. Silica Holdings, Inc. SLCA Jan. 3
Schlumberger Limited SLB Jan. 3
VanEck Vectors Oil Services ETF OIH Jan. 2
SPDR Gold Trust GLD Jan. 2
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
BB&T Corp. BBT Dec. 19
Ubiquiti Networks, Inc. UBNT Dec. 19
McDonald’s Corp. MCD Dec. 18
SPDR S&P Aerospace & Defense ETF XAR Dec. 18
Century Aluminum Co. CENX Dec. 18
Prosperity Bancshares, Inc. PB Dec. 18
Target Corp. TGT Dec.15
iRobot Corp. IRBT Dec.15
GlycoMimetics, Inc. GLYC Dec.15
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
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
KeyCorp KEY Dec. 6
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
Kulicke and Soffa Industries, Inc. KLIC Dec. 1
iShares Transportation Average ETF IYT Nov. 30
SPDR S&P Regional Banking ETF KRE 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
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
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
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
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
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
Cadence Design Systems, Inc. CDNS Aug. 4
Abbott Laboratories ABT Aug. 3
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
iShares Europe ETF IEV Jan. 26
Amazon.com AMZN Jan. 13
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



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