Charting a slow-motion breakout, S&P 500 edges to all-time high

U.S. stocks are higher early Friday, rising despite a soft monthly U.S. jobs report. Against…

U.S. stocks are higher early Friday, rising despite a soft monthly U.S. jobs report.

Against this backdrop, the S&P 500 and Nasdaq Composite have extended modest breakouts — tagging all-time highs — while the recently lagging Dow Jones Industrial Average vies to register its latest record close.

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

As illustrated, the S&P has rallied to its range top, tagging a nominal record high.

Friday’s early follow-through punctuates a potentially more decisive breakout. The session close, also the weekly close, will likely add color.

Slightly more broadly, the prevailing upturn punctuates follow-through atop the breakdown point — the 3,826-to-3,830 area — detailed repeatedly. Recall that consecutive session closes matched former resistance.

Meanwhile, the Dow Jones Industrial Average
US:DJIA
 has not broken out.

The index remains capped by its range top, an area matching record highs better illustrated on the daily chart.

Still, the Dow’s late-week follow-through punctuates a bullish V-shaped reversal from major support (29,964). Constructive price action.

True to recent form, the Nasdaq Composite
US:COMP
remains the strongest major benchmark.

As illustrated, the index has cleared its range top, reaching previously uncharted territory at all-time highs.

Here again, the prevailing V-shaped reversal punctuates a successful test of major support (12,973) also illustrated below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended its uptrend, reaching record territory. The prevailing upturn originates from support matching the 2020 peak (12,973), detailed repeatedly.

Tactically, a near-term target continues to project to the 14,200 area on follow-through.

Looking elsewhere, the Dow Jones Industrial Average has not reached record territory.

Still, the index has staged a directionally sharp bullish reversal, placing distance atop its breakdown point (30,283) and the 50-day moving average.

The Dow’s record close (31,188.38) and absolute record peak (31,272.22) are firmly within view.

More broadly, the prevailing upturn punctuates a successful test of last-ditch support — detailed previously — an area matching the mid-November range top (29,964). The January close registered about 18 points above support.

Meanwhile, the S&P 500 has narrowly tagged record highs.

Here again, the prevailing upturn originates from major support. Last week’s close registered within two points of the 50-day moving average, and has been punctuated by a pronounced bullish reversal.

The bigger picture

Collectively, the U.S. benchmarks’ bigger-picture technical backdrop remains comfortably bullish.

Consider that the big three U.S. benchmarks are pacing their best week in three months, rising in the wake of last week’s worst single-day downdraft across about the same span.

The strong February start punctuates successful tests of major support across each of the three major benchmarks. (See the daily charts.)

Moving to the small-caps, the iShares Russell 2000 ETF
US:IWM
 has extended to its latest record high.

The upturn punctuates grinding-higher follow-through hinged to the steep early-November vaccine-fueled gap higher. (See the Nov. 9 strong-volume spike.)

Meanwhile, the SPDR S&P MidCap 400 ETF
US:MDY
 has not reached record territory.

Still, the MDY has rallied to its former range, rising from a successful test of its breakout point (425.30). Bullish price action.

Looking elsewhere, the SPDR Trust S&P 500
US:SPY
 has tagged a nominal record high.

Market bears may justifiably contend that the prevailing upturn has been fueled by lackluster volume.

Conversely, market bulls will note that the prior pullback marked an event-fueled downdraft — (amid the short-covering drama) — punctuated by conspicuously tame selling pressure as it applies to the internals.

Combine the price action with the recent internals, and the backdrop remains comfortably bullish.

Placing a finer point on the S&P 500, the index has tagged a nominal record high.

The prevailing upturn punctuates follow-through atop the breakdown point (3,830), an area matching consecutive session closes.

More broadly, the prevailing upturn punctuates a bullish V-shaped reversal from major support.

The specific area matches the late-December breakout point (3,823) and the 50-day moving average. (Recall that the January close registered within two points of the 50-day moving average.)

On further strength, a near-term target projects from the S&P’s recent whipsaw to the 4,010 area, about 3.6% above current levels.

Beyond technical levels, the S&P 500 has extended its uptrend, and its intermediate-term bias remains bullish based on today’s backdrop.

Friday’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 30-year Treasury note yield
XX:TYX
 has broken out, reaching nearly 52-week highs, the highest level since Feb. 20, 2020.

The upturn places the marquee 2.0% within view.

Tactically, the former range top (1.90) pivots to support an area closely matching the late-2019 low. (Also the yield’s 2020 breakdown point, illustrated on the two-year chart.)

Delving deeper, the yield’s former breakout point closely matches the January gap (1.77) and the ascending 50-day moving average, currently 1.75. The 50-day has underpinned the prevailing uptrend, and a posture higher signals a bullish intermediate-term bias.

Elsewhere, the 10-year Treasury note yield has not registered February follow-through, though it continues to consolidate a technically consequential early-2021 breakout.

Fundamentally, the steepening yield curve is consistent with expectations for stronger economic growth and potentially pending higher inflation.

Moving to specific names, Cisco Systems, Inc.
US:CSCO
 is a large-cap name coming to life. (Yield = 3.1%.)

As illustrated, the shares have knifed to five-month highs, traversing a less-charted patch amid the August gap. The prevailing upturn punctuates a tight two-month range, effectively underpinned by gap support.

More broadly, the shares are well positioned on the three-year chart, rising to challenge the mid-2019 range top (48.45) and the 100-week moving average. Follow-through higher would punctuate a massive double bottom, opening the path to a potentially consequential breakout.

Tactically, a sustained posture above the former range top (46.00) signals a comfortably bullish bias.

Note that the company’s quarterly results are due out Feb. 9.

Profiled Dec. 21, Ballard Power Systems, Inc.
US:BLDP
 has returned 80.1% and remains well positioned.

The shares initially spiked about three weeks ago, gapping higher after the company announced an order to power Scotland’s first fuel-cell powered train.

The subsequent range is a bullish continuation pattern punctuated by this week’s lift to challenge 19-year highs. Tactically, a breakout attempt is in play barring a violation of near-term support, circa 33.70.

KeyCorp
US:KEY
 is a well positioned large-cap regional bank. (Yield = 3.9%.)

Fundamentally, the regional banks benefit from rising yields — detailed previously — in the form of an improved rate spread, the difference between the rate at which a bank borrows, and the rate it subsequently lends to customers.

Technically, the prevailing upturn punctuates a successful test of the breakout point, an area closely matching the 50-day moving average.

The pending test of the range top — the 18.93-to-19.22 area — should be a useful bull-bear gauge. An intermediate-term target projects to the 21 area on follow-through.

Finally, Datadog, Inc.
US:DDOG
 — public since September 2019 — is a well positioned large-cap name.

As illustrated, the shares have tagged three-month highs, edging atop resistance matching the December and January peaks. The upturn punctuates a bullish ascending triangle.

On further strength, more distant inflection points match the record high (118.13, established Oct. 13) and a projected target in the 120 area.

Note that the company’s quarterly results are due out Nov. 11.

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

Appian Corp.

APPN

Feb. 4

Diamondback Energy, Inc.

FANG

Feb. 4

Gogo, Inc.

GOGO

Feb. 4

Wix.com, Ltd.

WIX

Feb. 3

CarMax, Inc.

KMX

Feb. 3

Sierra Wireless

SWIR

Feb. 3

Toll Brothers, Inc.

TOL

Feb. 2

Eagle Materials, Inc.

EXP

Feb. 2

Avis Budget Group, Inc.

CAR

Feb. 1

Capital One Financial Corp.

COF

Jan. 29

NetApp, Inc.

NTAP

Jan. 29

Aptiv, plc

APTV

Jan. 29

Rio Tinto Group

RIO

Jan. 26

Sorrento Therapeutics, Inc.

SRNE

Jan. 26

Netflix, Inc.

NFLX

Jan. 25

Cummins, Inc.

CMI

Jan. 25

Invesco Solar ETF

TAN

Jan. 22

Magna International, Inc.

MGA

Jan. 22

M.D.C. Holdings, Inc.

MDC

Jan. 22

Zebra Technologies Corp.

ZBRA

Jan. 14

Chegg, Inc.

CHGG

Jan. 11

Macy’s, Inc.

M

Jan. 11

Nexstar Media Group, Inc.

NXST

Jan. 11

iShares Transportation Average ETF

IYT

Jan. 11

Energy Select Sector SPDR

XLE

Jan. 8

Teledoc Health, Inc.

TDOC

Jan. 8

Skyworks Solutions, Inc.

SWKS

Jan. 7

Financial Select Sector SPDR

XLF

Jan. 7

Synaptics, Inc.

SYNA

Jan. 4

Sunrun, Inc.

RUN

Dec. 23

ShockWave Medical, Inc.

SWAV

Dec. 23

JPMorgan Chase & Co.

JPM

Dec. 22

Ballard Power Systems, Inc.

BLDP

Dec. 21

LivePerson, Inc.

LPSN

Dec. 21

United Therapeutics Corp.

UTHR

Dec. 21

Shopify, Inc.

SHOP

Dec. 18

CyberArk Software Ltd.

CYBR

Dec. 18

Calix, Inc.

CALX

Dec. 17

Elastic N.V.

ESTC

Dec. 17

Cerner Corp.

CERN

Dec. 17

Tenet Healthcare Corp.

THC

Dec. 16

Williams-Sonoma, Inc.

WSM

Dec. 15

iShares Nasdaq Biotechnology ETF

IBB

Dec. 15

SDPR S&P Regional Banking ETF

KRE

Dec. 14

Etsy, Inc.

ETSY

Dec. 14

Plug Power, Inc.

PLUG

Dec. 9

F5 Networks, Inc.

FFIV

Dec. 8

Emerson Electric Co.

EMR

Dec. 8

Zscaler, Inc.

ZS

Dec. 7

Fortinet, Inc.

FTNT

Dec. 7

Kulicke and Soffa Industries, Inc.

KLIC

Dec. 7

Dillard’s, Inc.

DDS

Dec. 4

Spotify Technology S.A.

SPOT

Dec. 3

Valero Energy Corp.

VLO

Dec. 3

Analog Devices, Inc.

ADI

Dec. 2

Sonos, Inc.

SONO

Dec. 1

American Airlines Group, Inc.

AAL

Nov. 30

Zillow Group, Inc.

ZG

Nov. 23

Bank of America Corp.

BAC

Nov. 20

SPDR S&P Oil & Gas Exploration and Production ETF

XOP

Nov. 20

MetLife, Inc.

MET

Nov. 19

Kohl’s Corp.

KSS

Nov. 18

Applied Materials, Inc.

AMAT

Nov. 17

RingCentral, Inc.

RNG

Nov. 13

Regions Financial Corp.

RF

Nov. 13

Snap, Inc.

SNAP

Nov. 9

Norfolk Southern Corp.

NSC

Nov. 9

Communications Services Select Sector SPDR

XLC

Nov. 5

Health Care Select Sector SPDR

XLV

Nov. 5

Alphabet, Inc.

GOOGL

Nov. 5

Keysight Technologies, Inc.

KEYS

Nov. 4

8×8, Inc.

EGHT

Nov. 3

Exact Sciences Corp.

EXAS

Nov. 2

Universal Display Corp.

OLED

Nov. 2

Dentsply Sirona, Inc.

XRAY

Oct. 27

Maxim Integrated Products, Inc.

MXIM

Oct. 21

The Travelers Companies, Inc.

TRV

Oct. 21

Micron Technology, Inc.

MU

Oct. 20

Vulcan Materials Co.

VMC

Oct. 19

ON Semiconductor Corp.

ON

Oct. 16

Ford Motor Co.

F

Oct. 15

First Solar, Inc.

FSLR

Oct. 13

SPDR S&P Homebuilders ETF

XHB

Oct. 9

Shake Shack, Inc.

SHAK

Oct. 9

SPDR S&P Biotech ETF

XBI

Oct. 8

Twilio, Inc.

TWLO

Oct. 8

Cloudflare, Inc.

NET

Oct. 7

SailPoint Technology Holdings, Inc.

SAIL

Oct. 1

Martin Marietta Materials, Inc.

MLM

Sept. 30

Abercrombie & Fitch Co.

ANF

Sept. 29

Zendesk, Inc.

ZEN

Sept. 23

Scientific Games Corp.

SGMS

Sept. 23

Crocs, Inc.

CROX

Sept. 14

Five Below, Inc.

FIVE

Sept. 10

Eastman Chemical Co.

EMN

Sept. 10

Deere & Co.

DE

Aug. 24

Johnson Controls International

JCI

Aug. 21

Canadian Solar, Inc.

CSIQ

Aug. 20

General Motors Co.

GM

Aug. 20

Builders FirstSource, Inc.

BLDR

Aug. 18

Enphase Energy, Inc.

ENPH

Aug. 13

Freeport McMoRan, Inc.

FCX

Aug. 10

Industrial Select Sector SPDR

XLI

Aug. 6

Penn National Gaming, Inc.

PENN

July 30

SPDR S&P Metals & Mining ETF

XME

July 28

iShares MSCI South Korea ETF

EWY

July 28

Advanced Micro Devices, Inc.

AMD

July 23

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Roku, Inc.

ROKU

July 16

Consumer Discretionary Select Sector SPDR

XLY

July 13

SunPower Corp.

SPWR

July 13

Danaher Corp.

DHR

June 24

Fiverr International, Ltd.

FVRR

June 19

Square, Inc.

SQ

June 8

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

Synopsis, Inc.

SNPS

May 27

Agilent Technologies, Inc.

A

May 15

Five9, Inc.

FIVN

Apr. 24

Chewy, Inc.

CHWY

Apr. 24

Tesla, Inc.

TSLA

Apr. 23

VanEck Vectors Semiconductor ETF

SMH

Apr. 17

Okta, Inc.

OKTA

Apr. 16

Target Corp.

TGT

Apr. 16

Invesco QQQ Trust

QQQ

Apr. 14

Apple, Inc.

AAPL

Mar. 27

iShares MSCI Emerging Markets ETF

EEM

Mar. 19

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.