The S&P 500 is now less than 1% from the all-time closing high it made back in May. It has been nearly six months now since the last high was made, and a breakout to new highs will be seen as a very positive development by technicians. We expect this resistance level to be very stiff, and given how overbought the index is as it sets up for a test, it could take a few tries to finally break through.
Below is a look at our trading range screen for the 30 stocks in the Dow. For each stock, the dot represents where it is currently trading, while the tail end represents where it was trading one week ago. Moves into the red zone are considered overbought, while moves into the green zone are considered oversold. Stocks that are overbought but headed lower (to the left) may have seen short-term peaks, while stocks that are oversold but moving higher (to the right) may have bottomed.
As you can see, the entire Dow is pretty much overbought, with just 4 of the 30 stocks in the index trading in neutral or oversold territory. Don’t look now, but after lagging for quite a while, Apple (AAPL) is now the most overbought stock in the index — trading nearly two standard deviations above its 50-day moving average. Apple’s recent move leaves it up double digit percentage points once again (11.32%) in 2015.
UnitedHealth (UNH) is one of the few Dow stocks showing weakness. As you can see, the stock has moved lower within its range over the last week, and it has broken below its 50-day moving average.
In terms of YTD performance, Wal-Mart (WMT) is down the most with a decline of 32%, while Nike (NKE) is up the most with a gain of 36.56%. The average stock in the index is up just under 3% YTD.