The S&P 500 continues to battle overhead price resistance that's been well established since closing at its all-time high on May 21, 2015. While a bullish advance typically requires strong and wide participation from many sectors and industry groups, there's one that I'm watching very closely.
Internet stocks ($DJUSNS).
There's a bullish ascending triangle pattern in play on its long-term weekly chart (not shown below) and a breakout on heavy volume would measure to the 1250 level. Currently, the DJUSNS is at 1086 so that would represent an approximate rise of 15% from its current price.
Before we can consider that potential measurement, we need to see a clear breakout above the 1100 level. Here's the visual on the DJUSNS daily chart:
The good news is that momentum is beginning to strengthen so a breakout would likely be sustainable. But I do want to see heavy volume to confirm the breakout after so many attempts to clear 1100.
About the author:Tom Bowley is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas.