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Technically speaking, the U.S. benchmarks’ bigger-picture backdrop remains comfortably bullish as market rotation persists.

Consider that the Nasdaq Composite and S&P 500 have registered nominal record highs this week — tagging previously uncharted territory — though a pulling-teeth breakout attempt remains underway.

Before detailing the U.S. markets’ wider view, the S&P 500’s
SPX,
-0.46%

 hourly chart highlights the past two weeks.

As illustrated, the S&P continues to press record highs.

Its record close (3,386.15) and absolute record peak (3,393.52) remain under siege. (In fact, Tuesday’s early session high (3,395.06) has marked a nominal intraday record high.)

Conversely, near-term support (3,360) is followed by a firmer floor matching the February gap (3,328).

Meanwhile, the Dow Jones Industrial Average
DJIA,
+0.13%

 is digesting a break to five-month highs.

The prevailing five-session flag pattern positions the index to build on its initially decisive August breakout. Tactically, a near-term floor, circa 27,800, is followed by firmer support matching the June peak (27,580).

Against this backdrop, the Nasdaq Composite
COMP,
-1.25%

 has edged to an all-time high.

Consider that Monday’s close (11,129.7) eclipsed its former record peak (11,126.0) by just under four points.

Practically speaking, the breakout attempt remains underway.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has narrowly extended its August breakout.

The prevailing upturn punctuates a flag-like pattern hinged to the steep early August spike. (Recall the index started August with four straight record closes, and four consecutive closes atop the 20-day Bollinger bands, to punctuate a decisive two standard deviation breakout.)

This week’s slight follow-through positions the index to build on the early-month spike.

Tactically, the breakout point (10,840) is followed by deeper gap support (10,748). The August low (10,762) has registered slightly above the latter.

Looking elsewhere, the Dow Jones Industrial Average has sustained a break to five-month highs.

Recall that its initial breakout encompassed three straight closes atop the 20-day volatility bands, a stretch that was snapped last Tuesday.

The prevailing flag pattern — the tight one-week range, hinged to the steep early-August spike — marks the “expected” consolidation. As always, the bull flag is a continuation pattern, improving the chances of upside follow-through.

Tactically, more distant overhead matches the February gap (28,403).

Meanwhile, the S&P 500’s pulling-teeth breakout attempt remains in play.

The prevailing upturn originates from consecutive tests of gap support (3,328), an area better illustrated on the hourly chart.

The bigger picture

As detailed above, the major U.S. benchmarks are acting well technically.

On a headline basis, the Nasdaq Composite and S&P 500 have tagged nominal record highs this week, while the Dow Jones Industrial Average continues to digest a previously decisive August breakout.

Though not one-size-fits-all, the bigger-picture backdrop remains comfortably bullish.

Moving to the small-caps, the iShares Russell 2000 ETF is digesting a decisive rally to five-month highs.

The initial breakout registered as statistically unusual, encompassing two straight closes atop the 20-day Bollinger bands. (Also see comparable April, May and June breakouts.)

Tactically, downside inflection points match last week’s low (155.87) and the June peak (153.39).

Meanwhile, the SPDR S&P MidCap 400 ETF has flatlined at familiar resistance.

An extended test of the June peak (355.23) remains underway. (Recall the MDY also flatlined at the 200-day moving average, on its initial approach, and subsequently followed through in grinding-higher form.)

Looking elsewhere, the SPDR Trust S&P 500 is pressing uncharted territory.

Familiar overhead inflection points match the record close (338.34) and absolute record peak (339.08), both established Feb. 19.

Monday’s session high (338.34) precisely matched the SPY’s record close amid a slow-motion breakout attempt.

Placing a finer point on the S&P 500, the index continues to challenge record highs.

The prevailing upturn punctuates consecutive successful tests of major support (3,328).

Slightly more broadly, recall that last week’s initial approach of record territory induced a downdraft to support. The S&P has subsequently held tightly to the range top, signaling muted selling pressure amid the current retest. Constructive price action.

More immediately, the S&P is back for another crack at its record close (3,386.15) and absolute record peak (3,393.52).

To reiterate, Tuesday’s early session high (3,395.06) has marked a nominal intraday record. The S&P’s recent persistence near the range top improves the chances of more decisive follow-through.

Tactically, S&P 3,328 marks familiar support, an area that underpinned last week’s price action. A breakout attempt is in play barring a violation.

Also see: Charting the approach of record highs, S&P 500 rises amid market rotation.

Monday’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 iShares Japan ETF
EWJ,
+0.35%

 is showing signs of life technically. (Yield = 2.1%.)

As illustrated, the shares have rallied to the range top, rising to challenge six-month highs.

The tight one-week range signals muted selling pressure near resistance, laying the groundwork for potentially decisive follow-through. An intermediate-term target projects to the 62.00 area.

Conversely, the prevailing range bottom (57.70) is followed by the 50- and 200-day moving averages, trending indicators that bisect the range. A breakout attempt is in play barring a violation.

Moving to specific names, Starbucks Corp.
SBUX,
+0.76%

 is a well positioned large-cap name. (Yield = 2.1%.)

Technically, the shares have rallied to challenge trendline resistance closely tracking the 200-day moving average, currently 79.14.

Last week’s tight range at the trendline — a coiled spring — positions the shares for a potentially decisive breakout.

Tactically, gap support (78.00) is followed by a recent inflection point matching the 50-day moving average, currently 75.80. The breakout attempt is intact barring a violation.

Emerson Electric Co.
EMR,
+0.39%

 is a well positioned large-cap name. (Yield = 2.9%.)

As illustrated, the shares have recently reclaimed the 200-day moving average, ultimately reaching five-month highs after the company’s quarterly results, released Aug. 4. The breakout punctuates a bullish cup-and-handle defined by the March and June lows.

By comparison, the prevailing pullback has been flat, fueled by decreased volume, placing the shares near the breakout point (69.30) and 3.8% under the August peak.

Also notice the pending golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the longer-term trend. A sustained posture atop the moving averages signals a comfortably bullish bias.

Initially profiled July 16, Catalent,Inc.
CTLT,
-0.17%

 has returned 8.7% and remains well positioned. The developer of drug delivery systems has agreements with AstraZeneca and Moderna to manufacture their respective COVID-19 vaccines.

Late last month, the shares gapped to record territory, rising after the company reported strong preliminary fourth-quarter results. (The complete quarterly results are due out Aug. 31.)

The subsequent tight August range is a continuation pattern, positioning the shares to build on the initial strong-volume spike. Tactically, the 50-day moving average is rising toward gap support (85.50). The prevailing uptrend is intact barring a violation.

Finally, Builders FirstSource, Inc.
BLDR,
+1.81%

 is a mid-cap manufacturer of building materials including lumber and flooring.

Earlier this month, the shares knifed to record highs, rising after the announcement that the company will be added to the S&P MidCap 400. (The actual addition became effective before the open Monday, Aug. 17.)

The ensuing pullback has been comparably flat, placing the shares 6.5% under the August peak. Tactically, gap support matches the breakout point (28.40). The prevailing rally attempt is intact barring a violation.

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

Universal Display Corp.

OLED

Aug. 17

Steel Dynamics, Inc.

STLD

Aug. 17

Elanco Animal Health, Inc.

ELAN

Aug. 17

Eaton Corp.

ETN

Aug. 14

Pioneer Natural Resources Co.

PXD

Aug. 14

Brinker International, Inc.

EAT

Aug. 13

Enphase Energy, Inc.

ENPH

Aug. 13

Avis Budget Group, Inc.

CAR

Aug. 12

U.S. Global Jets ETF

JETS

Aug. 11

Nike, Inc.

NKE

Aug. 11

Nucor Corp.

NUE

Aug. 11

Financial Select Sector SPDR

XLF

Aug. 10

Freeport McMoRan, Inc.

FCX

Aug. 10

Sanmina Corp.

SANM

Aug. 10

Natera, Inc.

NTRA

Aug. 10

Lennar Corp.

LEN

Aug. 7

McDonald’s Corp.

MCD

Aug. 7

Mastercard, Inc.

MA

Aug. 6

United Health Group, Inc.

UNH

Aug. 6

Kansas City Southern

KSU

Aug. 6

Industrial Select Sector SPDR

XLI

Aug. 6

Verizon Communications, Inc.

VZ

Aug. 5

Sunrun, Inc.

RUN

Aug. 5

Coeur Mining, Inc.

CDE

Aug. 5

FireEye, Inc.

FEYE

Aug. 4

Amkor Technology, Inc.

AMKR

Aug. 4

Utilities Select Sector SPDR

XLU

Aug. 3

Jabil, Inc.

JBL

Aug. 3

Southern Copper Corp.

SCCO

Aug. 3

AMAG Pharmaceuticals, Inc.

AMAG

July 31

Agco Corp.

AGCO

July 31

Penn National Gaming, Inc.

PENN

July 30

At Home Group, Inc.

HOME

July 30

Procter & Gamble Co.

PG

July 29

SPDR S&P Metals & Mining ETF

XME

July 28

iShares MSCI South Korea ETF

EWY

July 28

HCA Healthcare, Inc.

HCA

July 28

Toll Brothers, Inc.

TOL

July 27

Landstar System, Inc.

LSTR

July 27

HP, Inc.

HPQ

July 24

Advanced Micro Devices, Inc.

AMD

July 23

AstraZeneca

AZN

July 23

Best Buy Co., Inc.

BBY

July 22

iShares Europe ETF

IEV

July 21

Fastenal Co.

FAST

July 21

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Monster Beverage Corp.

MNST

July 20

Palo Alto Networks, Inc.

PANW

July 20

iShares U.S. Home Construction ETF

ITB

July 17

Progressive Corp.

PGR

July 17

Livongo Health, Inc.

LVGO

July 17

Roku, Inc.

ROKU

July 16

Catalent, Inc.

CTLT

July 16

Cognizant Technology Solutions, Inc.

CTSH

July 16

Health Care Select Sector SPDR

XLV

July 16

Consumer Staples Select Sector SPDR

XLP

July 15

Home Depot, Inc.

HD

July 15

Costco Wholesale Corp.

COST

July 15

Kirkland Lake Gold, Ltd.

KL

July 15

MaxLinear, Inc.

MXL

July 14

Air Products & Chemicals, Inc.

APD

July 14

Consumer Discretionary Select Sector SPDR

XLY

July 13

Alphabet, Inc.

GOOGL

July 13

Sony Corp.

SNE

July 13

Eldorado Gold Corp.

EGO

July 13

SunPower Corp.

SPWR

July 13

D.R.Horton, Inc.

DHI

July 9

Taylor Morrison Home Corp.

TMHC

July 9

LGI Homes, Inc.

LGIH

July 8

Walmart, Inc.

WMT

July 8

J.B. Hunt Transport Services, Inc.

JBHT

July 8

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

Dell Technologies, Inc.

DELL

June 30

Zebra Technologies Corp.

ZBRA

June 30

Yeti Holdings, Inc.

YETI

June 25

Danaher Corp.

DHR

June 24

RH

RH

June 24

Hologic, Inc.

HOLX

June 23

First Solar, Inc.

FSLR

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

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

Xilinx, Inc.

XLNX

June 4

KLA Corp.

KLAC

June 4

FedEx Corp.

FDX

June 3

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

SolarEdge Technologies, Inc.

SEDG

May 29

Synopsis, Inc.

SNPS

May 27

Twilio, Inc.

TWLO

May 26

Take-Two Interactive Software, Inc.

TTWO

May 26

Lam Research Corp.

LRCX

May 26

Cree, Inc.

CREE

May 20

Applied Materials, Inc.

AMAT

May 19

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

Kinross Gold Corp.

KGC

May 11

Salesforce.com, Inc.

CRM

May 8

Facebook, Inc.

FB

May 7

Spotify Technology S.A.

SPOT

May 5

Inphi Corp.

IPHI

Apr. 29

Qorvo, Inc.

QRVO

Apr. 29

Old Dominion Freight Line, Inc.

ODFL

Apr. 29

Dollar General Corp.

DG

Apr. 28

Cadence Design Systems, Inc.

CDNS

Apr. 27

ServiceNow, Inc.

NOW

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

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

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

SPDR Gold Shares ETF

GLD

Jan. 2

Teledoc Health, Inc.

TDOC

Nov. 1

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.

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