Stocks today sold off late in the session but still closed higher, while an important test for the Nasdaq composite raised the possibility of a new pullback for the market.
XChart readers likely noticed that the Nasdaq peaked Wednesday as soon as it got to its 200-day moving average, right at 7462. The line stood as a potential level of resistance and represented a ceiling Wednesday.
The stock market's modest pullback last week came after the S&P 500 hit resistance near its 200-day average. But the S&P 500 Wednesday closed about 1% above that long-term price trend indicator, a sign that the market can beat resistance.
Still, the late selling and behavior of the Nasdaq should tell investors to watch for a possible pullback. The composite ended with a gain of less than 1%.
The S&P 500 ended 0.3% higher for its fourth consecutive gain. It was the highest close for the S&P and Nasdaq since Dec. 3.
The Dow Jones industrial average added 0.5% and is a more comfortable 5% above its 200-day line. Its 200-day average nearly coincided with the 25,000 level.
Volume rose on the Nasdaq and fell on the NYSE, based on unconfirmed data.
The energy sector led Wednesday after U.S. crude prices climbed 1.5% to $53.90 a barrel. Weekly U.S. oil data showed steady production but rising inventories. Energy Select Sector SPDR Fund (XLE) rose 1.3%.
Consumer discretionary, industrial and technology sectors also performed well. Sectors that are at least partly defensive — utilities and real estate — were Wednesday's weakest.
Innovator IBD 50 ETF pared gains, closing with a 0.2% gain. CyberArk (CYBR) was a drag on the index as shares of the security software company fell more than 1% ahead of its earnings report early Thursday. The stock is in buy range from an 81.98 buy point.
Charles River Labs (CRL) gapped above the 129.65 buy point of a cup-with-handle base in heavy volume. The company reported earnings that topped expectations. The handle entry is not visible on Charles Rivers' weekly chart, but today's powerful move implies it is the correct entry.
Inphi (IPHI) rose above the 40.94 buy point of a cup with handle in higher but unimpressive volume for the chip designer. The stock closed right at the entry.
Thinly traded SPS Commerce (SPSC) leapt past the 100.78 buy point of a saucer base in big volume, after the supply-chain management company beat profit expectations late Tuesday. Canaccord Genuity raised its price target from 95 to 110.
"If there are two things that can get, or in this case keep, a stock working, it's accelerating revenue growth and sustainable margin improvement. We think SPSC certainly has the latter, and time will tell on the former," analysts wrote.
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