Charting a bullish March start: S&P 500, Nasdaq maintain major support

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 respectably from the 50-day moving average.

Recall that consecutive monthly closes — January and February — have registered within two points of the 50-day moving average amid successful retests.

Conversely, additional overhead matches the range top (3,930), an area that capped last week’s price action.

Meanwhile, the Dow Jones Industrial Average
US:DJIA
 has whipsawed of late near recent record highs.

Put differently, the index has tried to break from its range — in both directions — ultimately concluding with a bull-bear stalemate.

(The Dow initially broke 356 points above the range, then 361 points under the range.)

Against this backdrop, the Nasdaq Composite
US:COMP
remains the weakest major benchmark.

Nonetheless, the index has maintained major support matching the 2020 peak (12,973), an area also illustrated below.  

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has rallied from last-ditch support matching the 2020 peak (12,973), detailed repeatedly.

Last week’s low (13,003) registered slightly above support to punctuate the second straight late-month retest. (The late-January low (12,985) also registered just above support.)

The prevailing rally from support places the Nasdaq back atop its 50-day moving average, currently 13,335.

On further strength, the breakdown point (13,730) marks notable resistance. The pending retest from underneath should be a useful bull-bear gauge.

Looking elsewhere, the Dow Jones Industrial Average remains the strongest major benchmark.

Still, the index has registered a swift 1,000-point whipsaw from last week’s record high.

Recall the Dow has tried to break above, and below, the mid-February range, thus far concluding with a bull-bear stalemate. Range-bound price action is bullish against the prevailing backdrop.

Meanwhile, the S&P 500 has rallied aggressively from its 50-day moving average to punctuate the second straight late-month retest.

To reiterate, the sharp reversal marked the S&P’s biggest single-day gain since June.

The bigger picture

Collectively, the major U.S. benchmarks are acting well technically, on balance, though the recent price action remains uneven.

On a headline basis, the S&P 500 and Nasdaq Composite have maintained major support, rising from a second straight successful retest. (See the daily charts.)

Each big three benchmark’s intermediate-term bias remains bullish.

Moving to the small-caps, the iShares Russell 2000 ETF
US:IWM
 has sustained a February break to record highs.

The prevailing upturn punctuates a successful test of the breakout point (216.70).

Similarly, the SPDR S&P MidCap 400 ETF
US:MDY
 has sustained its break to a higher plateau.

Here again, the MDY has asserted an orderly range, underpinned by the breakout point.

Combined, the small- and mid-cap benchmarks have established firmly-grounded uptrends, punctuated by consecutive successful tests of well-defined support.

Looking elsewhere, the SPDR Trust S&P 500
US:SPY
 has weathered a slightly more aggressive pullback.

The strong-volume downturn has been underpinned by the 50-day moving average, and punctuated by a bullish reversal.

Placing a finer point on the S&P 500, the index has rallied sharply from a jagged test of its 50-day moving average.

From current levels, the former breakout point (3,870) remains a notable floor, also detailed on the daily chart below. A retest is already underway early Tuesday.

Widening to the six-month view, the strong March start punctuates the S&P’s second straight late-month retest of the 50-day moving average.

Recall that consecutive monthly closes — January and February — registered within two points of the 50-day moving average.

More immediately, the S&P’s bullish reversal places it back atop the former breakout point (3,870). Constructive price action.

Beyond technical levels, the U.S. sub-sector backdrop remains bullish — as detailed last week — and the market internals continue to signal a reasonably firmly-grounded uptrend. The S&P 500’s intermediate-term bias remains comfortably bullish, based on today’s backdrop.

Also see: Charting a market divergence, Nasdaq violates the breakout point.

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 Industrial Select Sector SPDR
US:XLI
 is acting well technically amid market rotation.

Late last month, the group reached record territory, clearing well-defined resistance amid a sustained volume increase.

The subsequent pullback has been orderly, underpinned by the breakout point (90.30), positioning the group to extend its uptrend.

More broadly, the group remains well positioned on the three-year chart, rising from a continuation pattern hinged to the 2020 V-shaped reversal. A near-term target continues to project to the 96 area.

Initially profiled Feb. 12, Dow 30 component Intel Corp.
US:INTC
 has edged slightly higher and remains well positioned. (Yield = 2.3%.)

The shares initially spiked six weeks ago, staging a mid-January gap higher after the company appointed a new CEO. The breakout punctuated a massive bullish island reversal defined by the July and January gaps. (See the one-year chart.)

The subsequent pullback filled the gap to punctuate a successful test of the 200-day moving average.

More immediately, the prevailing flag-like pattern — the tight two-week range — positions the shares to build on the January spike. Tactically, notable support spans from about 59.20 to 60.00. A sustained posture higher signals a comfortably bullish bias.

Boeing Co.
US:BA
 is a Dow 30 component coming to life.

Late last month, the shares knifed to two-month highs, clearing resistance on increased volume.

The upturn builds on the initial early-November vaccine-fueled spike and subsequent early-February trendline breakout.

Tactically, the breakout point, circa 217.00, is closely followed by the 50-day moving average, currently 211.30, a recent bull-bear inflection point. The prevailing rally attempt is intact barring a violation.

Mastercard, Inc.
US:MA
 is a well positioned large-cap name.

As illustrated, the shares have rallied to the range top, rising to briefly tag a fractional record high. In practice, resistance matching the August peak (367.25) remains under siege.

Underlying the upturn, its relative strength index (not illustrated) has registered six-month highs, improving the chances of eventual follow-through.

More broadly, the shares are well positioned on the three-year chart, rising from a prolonged continuation pattern hinged to the massive 2020 V-shaped reversal. A near-term target projects to the 385 area on follow-through.

Initially profiled Dec. 14, Etsy, Inc.
US:ETSY
 has returned 43.9% and remains well positioned.

Technically, the shares have staged a strong-volume break to record territory, rising after the company’s quarterly results, released late last week.

The upturn originates from support matching the late-January low, and punctuates a modified double bottom.

Tactically, the breakout point (239.50) is followed by the former range top (226.70). A sustained posture higher signals a firmly-bullish bias.

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.