S&P 500 asserts the range amid June breakout attempt

Focus: Energy sector's breakout attempt, Apple teeters on 200-day average, XOP, XLE, AAPL, BA, APLS

U.S. stocks are slightly higher early Wednesday, rising amid a sluggish, but nonetheless constructive, June start.

Against this backdrop, the S&P 500 remains range-bound, consolidating within striking distance of record territory.

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

Editor’s Note:  Tuesday’s review was published, though the email was not sent due to a Substack.com administrative procedure. As always, updates can be directly accessed at chartingmarkets.substack.com.

As illustrated, the S&P has sustained its break from a double bottom, the W formation defined by the May lows.

Still, the subsequent follow-through has been flattish, capped by April peak (4,218). More distant inflection points match the S&P’s record close (4,232.60) and absolute record peak (4,238.04).

Meanwhile, the Dow Jones Industrial Average has extended its late-May breakout, though narrowly.

Tactically, Tuesday’s close (34,575) closely matched gap support (34,572).

On further strength, gap resistance (34,741) is closely followed by the Dow’s record close (34,777.76).

Against this backdrop, the Nasdaq Composite is digesting its late-May breakout.

Recent follow-through punctuates a successful test of the March peak (13,620), an intermediate-term bull-bear inflection point detailed repeatedly.

Conversely, the Nasdaq’s one-month range top (13,828) remains an overhead inflection point. Tuesday’s session high (13,836) registered nearby.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended a grinding-higher rally atop the 50-day moving average and the March peak (13,620).

The prevailing upturn originates from a nearly 8-to-1 up day on the Nasdaq’s initial rally from the 13,000 mark.

Tactically, a sustained posture atop the 50-day moving average, currently 13,629 — (roughly matching the March peak) — signals a bullish-leaning intermediate-term bias.

Looking elsewhere, the Dow industrials’ backdrop remains comparably straightforward.

As illustrated, the index has extended a rally from the 50-day moving average in grinding-higher form.

Its record close (34,777.76) and absolute record peak (35,091.56) are increasingly within striking distance.

Conversely, the April peak (34,256) remains a downside inflection point, also detailed on the hourly chart.

Meanwhile, the S&P 500 is digesting a modest late-May breakout, of sorts.

Tactically, familiar support matches its former range top — the 4,188-to-4,191 area.

The bigger picture

Collectively, the major U.S. benchmarks are acting well enough technically, even amid a sluggish June start.

Recall that each index concluded May with a successful test of major support — S&P 4,191, Dow 34,256 and Nasdaq 13,620 — followed by modest upside follow-through. Constructive price action. (See the hourly charts.)

Moving to the small-caps, the iShares Russell 2000 ETF remains range-bound.

To reiterate, notable overhead spans from 230.30 to 230.95, levels matching the February and April peaks.

Perhaps not surprisingly, the SPDR S&P MidCap 400 remains comparably stronger.

Its record close (504.81) is firmly within striking distance.

Placing a finer point on the S&P 500, the index has sustained its break from a double bottom — the W formation — defined by the May lows.

Tactically, familiar support holds in the 4,188-to-4,191 area.

Conversely, the April peak (4,218.78) remains an overhead sticking point. Last week’s high (4,218.36) matched resistance.

Returning to the six-month view, the S&P 500 has flatlined of late, digesting a May volatility spike.

The prevailing upturn punctuates consecutive tests of the 50-day moving average. On further strength, the S&P’s record close (4,232.60) and absolute record peak (4,238.04) remain within view.

More broadly, a near- to intermediate-term target projects from the S&P’s mini double bottom to the 4,310 area, detailed previously.

Beyond specific levels, the S&P 500’s intermediate-term path of least resistance continues to point higher pending signs of a bearish pulse.

Watch List

Drilling down further, consider the following sectors and individual names:

To start, the SPDR S&P Oil & Gas Exploration and Production ETF has broken out, rising amid surging crude oil prices. (Yield = 1.7%.)

West Texas Intermediate (WTI) and Brent crude oil prices have tagged their highest levels since 2018 this week.

Against this backdrop, the group has tagged 17-month highs, gapping atop the March peak.

Tactically, the top of the gap (91.35) closely matches the breakout point and is followed by the mid-May range bottom. A sustained posture higher signals a firmly-bullish bias.

Meanwhile, the Energy Select Sector SPDR is challenging 15-month highs. (Yield = 4.2%.)

The prevailing upturn has been fueled by increased volume — and punctuates a tight May range — laying the groundwork for potentially decisive follow-through. A near-term target projects to the 58 area.

Conversely, gap support (53.20) is followed by the May range bottom (51.40). A breakout attempt is in play barring a violation.

Moving to specific names, Dow 30 component Apple, Inc. has reached a headline technical test.

Consider that Tuesday’s close (124.28) registered fractionally atop the 200-day moving average, currently 124.22, to punctuate the third test in as many weeks. As always, major support is frequently violated on the third or fourth independent test.

Tactically, an eventual violation would raise a caution flag. Deeper floors match the May range bottom (122.25) and the March low (116.20).

Conversely, overhead inflection points match the October peak (125.40) and the 50-day moving average, currently 128.00. Follow-through atop this area would place the shares on firmer technical ground.

Slightly more broadly, Apple’s tight three-week range — defined by the 50- and 200-day moving averages — lays the groundwork for a potentially sharp move (in either direction) once the stalemate is resolved.

(Apple has registered just one close narrowly under the 200-day moving average (by 19 cents) over the past 14 months.)

Boeing Co. is a Dow 30 component coming to life.

Technically, the shares have extended a recent trendline breakout, reaching six-week highs. Though near-term extended, the steep late-May rally is longer-term bullish, and the shares are attractive on a pullback.

Tactically, the post-breakout low (245.35) is closely followed by the 50-day moving average, currently 241.10.

Finally, Apellis Pharmaceuticals, Inc. is a well positioned mid-cap biotech name.

The shares initially spiked two weeks ago, gapping higher after the company received FDA approval for its blood disorder treatment.

More immediately, the prevailing follow-through has tagged a nominal record high. Tactically, a breakout attempt is in play barring a violation of near-term support, circa 55.00.