Charts to Watch: SPX, TGT, AMGN

Nicole (0:00)

Joining me right now, Kevin Horner, Senior Manager, Trading Services, Charles Schwab, there he is, talking about the S&P 500 So look, I mean, we've certainly seen some pressure on stocks and volatility, even though we've managed to be so close to the highs, the all-time highs. So there's sort of this push and pull action. Levels you are watching, Kevin.

Kevin Horner (0:21)

A lot of the same stuff, Nicole, a lot of the same stuff. I mean, that 50-day moving average on the S&P continues to be a trend following level that a lot of bullish traders are eyeballing. When we've been below it, it's been opportunistic for bulls to deploy money at that point. We've actually held the 50-day. In fact, today's intraday low didn't get down to the 50-day, but it did hold it nonetheless. It looks like bulls stepped in as we've seen oil kind of pulling back a little bit.

The truth of the matter is we've just gone sideways for the better part of the last two months in here. And what I've called out on the SPX chart is just that declining RSI below us kind of validating that consolidation action we've seen. It's not a momentum move at the moment. We're still in this consolidation and rectangle-type price action. So I think in the interim and short run here, traders are probably just sitting on their hands waiting for something to change outside of that range. When that hits, expect change. Whether that's bearish or bullish remains to be seen, obviously, Nicole. Probably a catalyst-driven move. Potentially something from Micron this week could be that type of a catalyst for us.

Nicole (1:32)

All right. We will continue to watch. I mean, the S&P is down four out of five trading days, even though it's less than a percent away from the highs. One with an up arrow is Target. It's off the 52-week highs. It hit about a month ago, but still a gainer this year. What caught your eye here?

Kevin Horner (1:48)

Well, you're right. It is a gainer. You're looking at a 62% year-to-date return on Target. And really the key development here has been movement once more with a 50-period moving average. But on this chart, what I've applied is not just the 50-period moving average, but the linear regression channel. And what we're seeing is the coincidence of the 50-day moving average and the line of best fit in this one-year linear regression. And it's all coming together at that 154, 155 area, which I found to be pretty notable for us as short-term support. You'll note that we tested it two weeks ago, bounced off of it on Friday, and are trying to break back to the upside. And that's what I'm also calling out from the RSI and the MACD down below, improving bullish conditions here. Now, if you're a trader, you're waiting for perhaps the break of that downtrend line I've drawn in off the peak. But ultimately, what this looks like to many bulls is gonna be a standard three to four-week pullback after making a fantastic move and just finding support at or around not just the line of best fit, but the 50-day moving average as well.

Nicole (2:56)

All right. Last but not least, let's check in on AMGN. You're watching this name as well today. Right now, it's at 417, up 0.8 of 1%. Why is this one on your radar? What stands out in the technicals, Kevin?

Kevin Horner (3:08)

Well, you know, Nicole, I often try to find these positions that have been great in the interim and maybe, or great in recent history, but have pulled back to areas of support. And that's really what you're seeing here with AMGN in particular. Another one that's had a great year, 27% up year to date in a group that's done very well.

So you've seen excellent returns out of healthcare collectively this year. Now, the big move here was the throwback all the way to 375 We often see these developments, a big breakout through prior highs from early 26 That came at around the 383.9 level, and we rallied all the way up to 445, 450 before pulling back aggressively. So we held 375 and have now quickly recaptured the 20 and 50 day moving average confluence right at around 405 Now, what's notable about that, if nothing else, is that a trader who does not like the risk factor here might choose to move on under the 405 level. And I could validate that for a bearish viewpoint, but in the interim, that can be supportive in nature. And so the trader who says, yeah, I'm not gonna stick around under 405 because the risk is $30 to the downside, that would make sense. But they could also position themselves here for the potential move from where we are to maybe that 445, 450 zone up above as we potentially retest those highs we saw just last month.