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Hello MaryKateAustin. Nice to see your superb posts again.
S&P's slow-motion uptrend meets major resistance
12:26 pm ET 04/13/2010- MarketWatch Databased News
Editor's Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column, including 100 technical stock picks, every day, click here.
CINCINNATI (MarketWatch) -- After breaking all kinds of records during the market crash, the U.S. markets are repairing the damage in the completely opposite fashion.
Namely, with a stubborn, slow-motion uptrend.
Against this backdrop, the Standard & Poor's 500 Index has risen to major resistance, and this week's earnings reports will likely dictate its response to this area.
The S&P 500's hourly chart details the past three weeks.
As illustrated, the index topped Monday at 1,199 -- matching major overhead at the 1,200 mark -- before pulling in modestly. That's constructive price action.
From current levels, modest support holds at 1,191, followed by a firmer floor at the March peak of 1,180.
Meanwhile, the Dow Jones Industrial Average has edged from a tight two-week trading range, closing Monday at 11,006.
Its next true resistance holds around 11,100, while conversely, modest support rests at 10,980.
Not surprisingly, the Nasdaq Composite has also broken to another 2010 high.
Looking ahead, modest support holds at 2,443 with a firmer floor to be found at the March peak of 2,432.
Widening the view to six months adds color.
As illustrated, the Nasdaq is placing distance atop the 2,400 mark, having closed Monday at 2,457.
Its next resistance holds around 2,473, a level that would match the August 2008 peak.
Also note that by taking the depth of the pullback from the January peak to the February trough -- namely, 226 points -- and adding this value to the January high, a longer-term target is established at 2,552, matching the May 2008 peak of 2,551.
Moving to the Dow, it's edged atop the 11,000 mark, closing Monday at 11,006.
Though the 11,000 mark isn't technically significant, the upturn is constructive to the extent that it marks a "higher high."
The S&P 500's six-month view remains constructive as well.
Again, the index topped Monday at 1,199 -- matching the 1,200 resistance -- and its refusal to pull in improves the chances of an eventual break higher.
The bigger picture
After breaking all kinds of records during the market crash, the U.S. markets are repairing the damage in the completely opposite fashion, staging a stubborn, slow-motion uptrend.
Returning to the SPDR Trust S&P 500's backdrop adds perspective.
Note that the chart above is unusually straightforward: The S&P's maintaining a stance atop its 20-day moving average.
The 20-day, currently at 1,174, has been a useful marker of the S&P's near-term trend, and an uptrend is in play barring a violation of this level.
Against this backdrop, the S&P's three-week view highlights related support points.
Consider the following areas:
-- The March peak holds at 1,180, matching a three-week uptrend.
-- Last week's low held at 1,175.
-- And again, the 20-day moving average, illustrated on the SPY's chart, rests at 1,174.
So collectively, near-term support spans from 1,174 to 1,180, and all trends point higher barring a violation of this area.
Moving to resistance, the S&P's two-year chart highlights a significant hurdle.
As illustrated, the 1,200 mark represents the breakdown point -- matching the July 2008 low -- an area that "should" challenge market bulls.
Looking ahead, the question becomes: What happens when an unimpressive, but stubborn, uptrend meets obvious major resistance?
Time will tell -- and this week's earnings reports will likely set the tone.
However, the uptrend gets the benefit of the doubt until proven otherwise, and an eventual break atop S&P 1,200 looks increasingly likely.
As detailed last week, the Nasdaq has already broken sharply atop its corresponding resistance.
Tuesday's watch list
The charts below highlight names well positioned technically. These are intended as radar-screen names -- sectors or stocks positioned to move in the near term. For the original comments on the stocks below, check out The Technical Indicator Library.
ETF SymbolMon CloseSupport ResistanceSemiconductor HOLDRsSMH$28.75$27.90$28.70
Initially profiled March 5, the semiconductors have risen to a significant technical test.
Specifically, the group has edged just atop resistance at the January peak, matching an 18-month range top.
The group's tight trading band, just under resistance, has been established on lighter volume -- suggesting sellers are absent and thus improving the chances of another leg higher.
Note that sector bellwether Intel Corp.'s quarterly results are due out after the close on Tuesday, and the response to its report will likely set the sector's near-term tone. Based strictly on the technicals, the chart is setting up for an eventual breakout.
The charts below illustrate related names positioned to rise: Intel , LSI Corp. and KLA-Tencor .
Company SymbolMon CloseSupport ResistanceNIKE Inc. NKE$75.53$73.00New High
Profiled March 5, Nike Inc. has returned 10.5% and remains well positioned.
The shares initially gapped higher last month, notching all-time highs after posting a strong financial results for the third quarter of fiscal 2010.
Since then, it's established a tight four-week trading range, and this week's upturn positions the shares to build on the March breakout.
Company SymbolMon CloseSupport ResistanceSINA Corp. SINA$40.07$38.20$42.10
Sina Corp. is a China-based provider of online-media services.
Technically speaking, it's established support at the 200-day moving average, widely tracked as a longer-term trending indicator.
Moreover, this week's upturn has come on increased volume, positioning the shares to retest the March peak.
Company SymbolMon CloseSupport ResistanceLeucadia National Corp.LUK$26.84$26.00New High
Leucadia National Corp. is a large-cap conglomerate coming to life.
Specifically, it's knifed from a bullish double-bottom formation defined by the November and February lows.
Based on the pattern's depth, a longer-term target holds just above $30, and a pullback toward the breakout point would mark an attractive entry.
Company SymbolMon CloseSupport ResistanceUlta Salon, Cosmetics & FragranceULTA$23.22$21.90$23.45
Profiled March 19, Ulta Salon, Cosmetics & Fragrance remains well positioned.
The shares initially broke out last month, notching two-year highs after posting strong quarterly results.
By comparison, the ensuing consolidation has been flat, and this week's upturn positions the shares to build on the March breakout.
Company SymbolMon CloseSupport ResistanceJacobs Engineering GroupJEC$46.74$46.00$48.30
Jacobs Engineering Group is a large-cap provider of engineering and construction services.
Late last week, the shares spiked to six-month highs amid takeover speculation.
The breakout came on strong volume -- improving the chances of further follow-through -- and its path of least resistance points higher barring a violation of the April low.
(Also note the impending golden cross, or 50-day/200-day moving average crossover, another bullish signal.)
could you update IVIT chart? thanks
You had a long weekend to rest, Mary -
I hope it was a wonderful opportunity!
How are you feeling?
J
All old trendlines on my charts are gone. I accidentally deleted my annotated list at stockcharts.com .
They were so kind to restore it from their backups, but the "linkable versions" do not show the trendlines anymore because of it. So no trendlines are shown in my old postings here for any annotated chart I did.
If i want them to show again i will need to repost all of them as a linkable version. For most older charts i will not repost.
So just so you know why my old charts dont have any trendlines right now.
WDRP - Expect a pop on Monday or Tues but after that, the charts are telling me that its coming down. MM"s are trying to bring it back down to .0085ish. News and strong buying pressure can always change that temporarily, but MM's will succeed to get it down to around where the big spike up on Feb 15th or 16th started. JMHO.
Happy Easter to those that celebrate!
mka need a chart for wdrp. thanks alot
gl read_this_n0w' on
Does depend how you draw the downtrendline, still likely it has its bottom here 1,00-1,10 and i think 1,10
the lower highs later make me use those for the trendline, with either trendline still like the entry here, esp for a china stock as well (ie more volatile either direction usually)
same with you :)
yw...
happy trading my friend
thank you sir
going huge here.... checkout 50sma at .60 once that breaks hello $$$
ty i'll check it out
gl
yw eastunder
It does help,
but I won't lie -
I liked your old trendline better. ;) LOL
Thanks for the update, MTC!
I appreciate it!
J
Well, at this rate - that should be accomplished fairly quick.
2 bucks next stop... jmo
mtcinc0,
Is it possible to get an updated chart/opinion on the chart you posted earlier on TRID? Based on your trendline it seems todays move might have significance?
Link back for the original chart. ;)
Thanks!
J
Dear MK Austin:
I've learned a great deal from your chart work and thought to toss in a brief get well soon message - from across the Pond here in Denmark.
-pappi
Mary,
Today if you are bored, and ignoring Doctors orders to continue on with your resting - PBR needs a chart but only if you feel up to it.
I'm in no hurry.
Thank you Mary! :)
Enjoy the movies.
Hello Mary Kate,
Is it possible to do an update on the charts BFHJ and WYNX?
Shame on you - but.... being the selfish gal I am - Can I get an updated SIRI chart before you pass out and the Doc sends you to the hospital? (JK)
You should be resting like he said, Girl!
Because this is what will happen if we all see you post! ;)
It will be awful! Trust me.
We haven't had our Mary for a few days too long!
SO GET REST, MARY! You will need your strength! ;)
J
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