Brief Technical Analysis: WTI 59.50 Top and Turn Target and more

In this briefing:

1. WTI 59.50 Top and Turn Target
2. Opportunities in U.S. Technology Sector
3. LG Corp Daily Cycle Pivot and Re Test of Base Line Support
4. S&P 500 and S&P 600 Testing Resistance…Still
5. S&P Directional Break Points

1. WTI 59.50 Top and Turn Target

WTI’s bullish counter trend rally cycle from the touted low at 45 is maturing and we are hunting for a fresh high to turn from long to short WTI. A peak in oil would align with a softer economic cycle in the next quarter.

Price triangulation is touted as a tactical bullish breakout pattern that will induce a fresh high near targeted dual projection/retracement. This rise is viewed as a more exhaustive rally that will begin to run out of steam with risk of a fade near 58-59. This is a tradable upside move.

RSI dual tops have show high confidence in market peaks from early 2018 and a final push higher out of the triangle bull flag would get us back to the 70 top resistance to nail down a double top. It is this dual top and MACD resistance that worn of an intermediate peak for oil into strength.

Energy shares are underperform oil and a frequent cycle leader to an oil peak.

2. Opportunities in U.S. Technology Sector

Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of our Relative Strength Rankings (RSRs). Internally, semis and semi-suppliers continue to outperform and many names have pulled back to offer attractive entry points. In this report we highlight our favorite setups within the U.S. Technology Sector. 

3. LG Corp Daily Cycle Pivot and Re Test of Base Line Support

LG Corp (003550 KS) is resting on critical daily cycle pivot support; if broken would see momentum spill over into the weekly cycle with a bias to re test base line support.

Daily RSI has already broken the wedge support equivalent in price and very often a good leading indicator. LGC is currently resting just above key pivot support, that once broken would induce a slide back to more attractive and a better risk to reward zone.

4. S&P 500 and S&P 600 Testing Resistance…Still

The S&P 500 is beginning to come off of short-term overbought extremes, consolidating near the confluence of key overhead resistance and the 200-day moving average. This level is roughly 2,817 on the S&P 500 and roughly 1,000 on the S&P 600 Small Cap index. Some consolidation or a mild pullback is possible in the near-term, which we believe would help alleviate current overbought readings and allow for a more orderly and meaningful move higher.  In today’s report we highlight attractive Groups and stocks within the Consumer Discretionary, Health Care, and Services Sectors.

5. S&P Directional Break Points

S&P key outside day reversal sets the tone for a correction as the RSI is now breaking below trend support and a key downside trigger. This is the second reversal registered in the key 2,815-20 macro pivot zone.

Uptick resistance points below 2,820 are laid out as well as downsize pivot levels that once broken would induce a higher momentum decline.

Any break above SPX 2,820 would induce a short squeeze and we outlined a sector pair that would reward in such an event.

From now until the end of March it will be hard for bull momentum to remain intact given the bulk of good news is now priced in.