Charts to Watch: SPX, ZBRA, COP

Nicole Pedolides (0:01)

Welcome back to The Watch List. I'm Nicole Pedolides. It's time for Charts to Watch. Kevin Horner is with us, Senior Manager of Trading Services, Charles Schwab, taking a look at the S&P 500, which look, we saw the NASDAQ hitting some highs, and that snapped the four-day wind streak. And this one, a second straight down day for the S&P.

So what levels are you watching?

Kevin Horner (0:21)

Well, a couple of really tight ones, obviously. Nicole, I don't like the fact that we're getting pushback from resistance, but we could probably apply this directly to that moving yields today.

Pretty aggressive pop to the upside. And so pullback here is always fine. You know what? We've got a very short-term level. We had a beautiful gap move from Friday into Monday. Lows from Monday could be the zone of support. 76.85 up to 7,700, perhaps. I think that bears watching, as can the 50-day moving average. That's at 76.3 right beneath us.

And then another layer is the low we made last week following the FOMC decision. And that low happened to be right around 75.10, down to 7,500. So we've got a few areas for support. And as you know, Nicole, we should always be thinking about that downside risk in advance of any potential view of our market look here. So be thoughtful. Know where you want to change your view here. But hey, let's see if we, I'll go to the other side and say, hey, let's see if we can't get a breakout here following this pullback.

Nicole Pedolides (1:24)

Okay. We'll have to wait and see. We think about identification, data, Zebra Technologies, which is up over 50 percent this year. So what stands out in the technicals to you?

Kevin Horner (1:36)

Well, I'm glad you bring that up. 50 percent move this year, great. But really the two-year chart we're going to look at is the reminder of our many opportunities to participate in new uptrends. They occur initially with a break of a downtrend line. That's that final oval at the bottom here, working around the 50-day moving average. When it crossed the 200 to the upside, there was a little bit of a heads up. We consolidated quickly and then we had an earnings announcement that led to a fantastic 100-point move to the upside. Now, we've basically digested that 100-point move. It took a while. We built a pretty lengthy visually bull flag scenario here, and this week are breaking that to the upside. So what I like about that, of course, is it's a bullish chart in a breakout mode in a space today, that's actually under pressure. So you're getting a breakout in a tech stock while the rest of the sector is struggling.

Target on this could be the prior highs around 415 I think that looks like an area for potential profit taking and 335 beneath us, the 50-day simple moving average for trend management in the near term.

Nicole Pedolides (2:40)

Our last guest was Long Commodities, and some of those energy names, ConocoPhillips goes into that category of an energy winner. In fact, it hit an all-time high recently, but it's since pulled back some. Some of your thoughts and what catches your eye on this chart.

Kevin Horner (2:56)

Well, again, I'm going to go back to the process here, and that's one where a trader who was looking for more upside in energy could be looking for entry given the move we've seen in that sector this week. What we've gotten is a pullback in the entirety of energy to the 50-day moving average, and you're going to see something very much in line with that on Conoco here. Yesterday broke the 50-day moving average on a close. It's actually the first time we've really even tested it since we took it out in July. So this was a proper spot for a test of support. And today, with yesterday being the low day in this move, after having made a new 52-week high up there not that long ago, today, like two weeks less than it, today looks like a potential close above the high of our low day. So a spot where traders could once again look to expose their dollars to energy, maybe to Conoco with a tight exit strategy beneath this low that we made just yesterday. So if you're the trend trader who wants energy and has just been waiting and sitting patiently, well, this move in Conoco over the last six to seven sessions has brought you to an area of potential support where your risk, if you're wrong, is relatively limited to the downside if you're willing to move on a new low in price.