Charts to Watch: SPX, INTC, NOW

SPEAKER_1 (0:00)

Welcome back to The Watch List. Time now for Charts to Watch. Joining me, Kevin Horner, Senior Manager, Trade and Services, Charles Schwab. We're looking at the S&P 500, third straight, negative day, like the rest of the indices. What are your thoughts? What levels are you watching, Kevin?

Kevin Horner (0:15)

Well, good afternoon, Nicole. Yeah, it always comes down to whether we're gonna break an area of notable support. And we've come into this 7620 zone today. Our intraday low falls in at 7624, really close to that prior high. Remember, we hit peak of 7620 back in late May, and we've retreated to test that level. We've really not broken down here, everybody. We've just pulled back the 200 or 150 points, as it were, from the 7800

Watching the 50-day moving average, surely under 7600, under the 50-day, there's gonna be some traders who are gonna get a little defensive in nature. They might start building cash and SPX positions on a close or two, maybe a series of closes under the 7600 and the 50-day moving average, because that would increase the possibility of a deeper pullback. But in the meantime, if and until that does not occur, I guess we can stay as bullish as we want to be over 7600 We're just gonna have to see whether we actually take that level out with any conviction. And obviously, we've got plenty of risks that could do that for us or catalyst, perhaps, but for now, I still see 7600 basically the same level of support we've been talking about in watchlist hits now for the last couple of weeks.

SPEAKER_1 (1:33)

Okay, we know Barclays actually raised their year end target to 7950 today, another level to watch, perhaps.

Intel, well, that's been a winner. It's up nearly 190% in this year and 330% year over year. What stands out in this chart now?

Kevin Horner (1:50)

Yeah, you're right. It's not a great year, although the last two months, not nearly as fun for traders, especially if you were a buyer at the 140 zone that we rallied into. What we've seen recently has been the repair of this chart. Now, the thing that stands out to me today, two things notable. One, the 50-day moving average, we've recaptured it, we've held it for two days. We're gonna call today a hold, if you will, with an hour plus to play in the day. But the 106.5 level, that's the red line, right above us, we've rallied into it. This is our third, really, I guess our second challenge of this level for a potential breakthrough it. And if we can get above 106.50, 107 or so, then it's gonna look like a new short term high. And if that happens, we've got a higher high following a higher low and that's bullish in nature. We've also got an RSI that's climbing into the mid 60s range. We're seeing momentum play out here.

Don't be surprised if we get thrown back to the hunt to the $100 level, the 50 day moving average, that certainly could happen. And I think there's gonna be a number of traders out there who are gonna use that 50 day for trend management and trend support. But if this does close over 107 or make a move through 107, don't be surprised to see a momentum push to the upside rather quickly.

Near term, there's a gap ledged that exists from July 7th, and that could be up around 117 to 120 approximately.

SPEAKER_1 (3:23)

Okay, last but not least, we're looking at ServiceNow. One year it's been a laggard, it's down about 30%, just this month alone down over 10%.

What do you see when you see ServiceNow?

Kevin Horner (3:35)

Well, as is often the case, Nicole, once we go through these big swings with entire groups, we know that the software space was really beaten down. There's been a lengthy bottoming out. And this is an improving chart for sure. I've got it only on the six month basis here because the majority of the last two years has been an ugly downtrend, but the stock has really done well in the last three to four months. The levels we're watching, 130, we've tested this horizontal support, happens to be coincident with the 20 day moving average today at around 132 So we are right there with our last trade at 131.9 approximately. Now, the level below that may make sense for a trend manager who wants to give this more wiggle room, so to speak. If we get down and test 118, we should still feel bullish about this maneuver.

But a break of that level will change quite a bit of this so-called bullishness. So some levels to monitor, 130 if you're that short-term trader who thinks we can hold the 20 day and push us right back up to 145