Charts to Watch: SPXEW, ABNB, CSX

Nicole (0:00)

James Boyd, Senior Manager, Trading and Derivatives Coaching at Charles Schwab, is with me looking at the S&P 500 Equal Weight Index, which is up 2% this week. So what stands out here on the equal weight?

James Boyd (0:15)

This is really important that we want to really cover here today. So when you really look at the S&P 500, right, the SPX, we know that as of six weeks ago, the technology sector was 40% of the S&P 500 The S&P 500 is market cap weighted. If you look at the SPXEW, each stock in the SPX is not market cap weighted, it's actually 2 10ths of 1%. Each stock representing 2 10ths of 1%.

So when you really actually don't want to have an over weighting to technology, an investor might consider something like a product like SPXEW to try to ride the trend of the general market. Now the SPXEW or a product like it is up 17.5% year to date. Now, when you look at the SPXEW, it's not all sectors equaling 10% each-ish.

There are sectors like industrials, financials, information technology and health care that are overweight in this SPXEW. They represent about 15% each. Now, if you take a look at this chart, Nicole, you're going to really see that it wouldn't take a whole lot for the SPXEW to really break out to a brand-new high. Let's first watch on the chart. You'll see number one, here we are sitting right near the 9,000, maybe one day away from actually closing above that. Second thing I want us to watch is when we had a pullback in that number two there, we had a pullback to right around the 8,400, and we still held that support level of where we broke out from before. Third, we're actually seeing that where we had a run up in the price, a pullback to a rising upward trending 30 period moving average, which is a bullish sign. And fourth, when you really look at this, what we call a price pattern like a V pattern, we have a $600, 600 point measurement, really from 8,400 to 9,000, where some investors might be looking for a move, year end potentially, or in a Q1 of 27, maybe to 9,600. I think investors need to watch Spxew, maybe more than Spx.

Nicole (2:15)

Okay, next up, let's take a look at Airbnb, it could be a recent high of 197, but down this week, but it's been a winner recently. So what catches your eye on the levels, the Airbnb story here?

James Boyd (2:29)

Well, so first off, when you look at this chart, I want everyone to really think about, think about where Marriott is, M-A-R, think of where HLT is. So we're talking about Marriott and Hilton, right? Think of where they are. They're at brand new highs. So here's Airbnb, right? You don't stay at the hotels, you might go to Airbnb. Now, the three things we know about people is, number one, they like food and drink, number two, they like great company, and three, they like to take a vacation. Speaking of vacation, on this chart, we had an old resistance right around 150

Number two, we actually saw the price fall down to where that breakout level was. Three, we actually saw a higher low bounce right around, let's say, 160

And the fourth there, you're going to see that we actually gapped up, we made a brand new high in the last week or last Friday, and then we've actually checked back right to this 180 level. This 180 level, if we can stay above it, this would be a higher low, and now we're within shot of really making a breakout on the ascending triangle. I think investors need to watch the cue from Marriott and Hilton. If those continue to go higher, keep an eye on Airbnb.

Nicole (3:39)

Okay. Last but not least, let's talk about CSX down today, up over 40 percent for this year.

James Boyd (3:48)

Yeah. When we talk about CSX, so the chart that we're looking at is a one-year daily chart, and it's using what I call trend candles. The color of the candles are actually in reference to where the price is in relationship to the moving averages. The reason why we bring up CSX, obviously, we know the gas has still been pretty expensive. Diesel has been over, for the most part, probably over $6 a gallon, maybe higher in some areas.

And we know that, for example, if oil maybe goes higher, companies that are focusing on their margins might not really be shipping as much on trucks. They might say, look, let's do it by rail. Okay, now that might create some supply issues. Number two, when you really take a look at this chart, we had an old resistance area right around $46. Then we went to $53, a brand new high. And then we actually had a pullback. That pullback retested $46 again.