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Charting a bullish Q4 start: S&P 500 extends rally from major support

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Broadly speaking, the major U.S. benchmarks are off to a constructive October start, reclaiming key technical levels.

Against this backdrop, the S&P 500 has asserted a bullish-leaning intermediate-term bias, rising to three-week highs from a successful test of major support (3,328).

Charting a bullish Q4 start: S&P 500 extends rally from major support 2

Before detailing the U.S. markets’ wider view, the S&P 500’s
SPX,
+0.01%

 hourly chart highlights the past two weeks.

As illustrated, the S&P has extended its rally attempt, reaching three-week highs.

The prevailing upturn punctuates last week’s range, underpinned by major support (3,328).

From current levels, the breakout point (3,393) marks a near-term floor, a level matching the February peak.

Charting a bullish Q4 start: S&P 500 extends rally from major support 3

Similarly, the Dow Jones Industrial Average
DJIA,
+0.21%

 has cleared its range top.

Here again, the breakout punctuates a successful test of major support (27,447) a level that underpinned last week’s price action on a closing basis.

More immediately, the 28,000 mark remains an inflection point.

Charting a bullish Q4 start: S&P 500 extends rally from major support 4

Meanwhile, the Nasdaq Composite
COMP,
-0.21%

is challenging its range top.

The prevailing upturn punctuates a jagged, but successful, test of the 50-day moving average, an area better illustrated on the daily chart below.

Tactically, a notable floor matches the mid-September range top (11,245).

Charting a bullish Q4 start: S&P 500 extends rally from major support 5

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended its rally attempt, notching a “higher high” versus the mid-September peak (11,245).

The prevailing upturn punctuates a successful test of the 50-day moving average, currently 11,113, a recent bull-bear inflection point.

Tactically, the sustained break atop the 50-day moving average — combined with a “higher high” to start October — signals a bullish-leaning intermediate-term bias.

Charting a bullish Q4 start: S&P 500 extends rally from major support 6

Looking elsewhere, the Dow Jones Industrial Average has extended a rally atop key resistance.

The specific area matches the breakdown point (27,580) and the 50-day moving average, currently 27,684.

The Dow’s sustained rally atop resistance signals a bullish-leaning intermediate-term bias. Recall that the 50-day moving average defined the May, June and late-July lows.

Charting a bullish Q4 start: S&P 500 extends rally from major support 7

Meanwhile, the S&P 500 has also extended its rally attempt, edging atop next resistance (3,393).

In the process, the S&P has reclaimed its 50-day moving average, currently 3,369.

Slightly more broadly, the upturn punctuates a successful test of major support (3,328), a bull-bear inflection point detailed repeatedly.

The bigger picture

Collectively, the major U.S. benchmarks are acting well technically to start October, and the fourth quarter.

On a headline basis, the S&P 500 and Dow industrials have extended their rally attempts, rising from successful tests of major support — S&P 3,328 and Dow 27,447. (See the hourly charts.)

Charting a bullish Q4 start: S&P 500 extends rally from major support 8

Moving to the small-caps, the iShares Russell 2000 ETF has extended a rally from the September low.

In the process, the small-cap benchmark has reclaimed its 50-day moving average and the breakdown point (153.39).

The breakout neutralizes the September downdraft. Tactically, additional overhead matches the August peak (159.82).

Charting a bullish Q4 start: S&P 500 extends rally from major support 9

Meanwhile, the SPDR S&P MidCap 400 ETF has also reclaimed its 50-day moving average.

The prevailing follow-through punctuates an October upturn initially fueled by increased volume.

Charting a bullish Q4 start: S&P 500 extends rally from major support 10

Looking elsewhere, the SPDR Trust S&P 500
SPY,
+0.05%

 has also rallied atop major resistance.

The specific area matches its former breakout point (338.35) and the 50-day moving average, currently 336.35.

Recall that the prevailing upturn originates from major support matching the June peak.

Charting a bullish Q4 start: S&P 500 extends rally from major support 2

Placing a finer point on the S&P 500, its near-term backdrop is increasingly straightforward.

To start, the S&P has rallied from major support (3,328), a bull-bear inflection point detailed repeatedly. This area effectively underpinned last week’s range.

Within the range, the 50-day moving average, currently 3,369, remains an inflection point.

Charting a bullish Q4 start: S&P 500 extends rally from major support 7

Slightly more broadly, the S&P has edged atop the February peak (3,393), a level defining its former breakout point. This area pivots to near-term support.

On further strength, follow-through above the mid-September range top, circa 3,425, would mark a “higher high” incrementally strengthening the bull case.

Conversely, the S&P 500’s 50-day moving average — and major support (3,328) — remain useful bull-bear inflection points. A sustained posture higher signals a bullish-leaning intermediate-term bias.

Also see: Charting a corrective bounce: S&P 500 hesitates at 50-day average.

Tuesday’s Watch List

The charts below detail names that are technically well positioned. These are radar screen names — sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.

Charting a bullish Q4 start: S&P 500 extends rally from major support 13
Charting a bullish Q4 start: S&P 500 extends rally from major support 14

Drilling down further, the 10-year Treasury note yield
TNX,
+1.70%

 has knifed to its best levels since June, rising amid a risk-on trade. (Treasury yields and bond prices are inversely correlated. Lower bond prices signal increased investor risk appetite.)

The October upturn punctuates a tight seven-week range, underpinned by the 50-day moving average.

Tactically, the upturn places the yield’s range top (0.79) — a level closely matching the April peak — firmly under siege. Tuesday’s early session high (0.792) has matched resistance.

As detailed repeatedly, follow-through above the range top would open the path to a less-charted patch amid a developing double bottom. Such a move could be punctuated by swift upside follow-through. (See the mid-June spike.)

Conversely, a downside inflection point matches the yield’s former range top (0.75). The prevailing breakout attempt is intact barring a violation. (Also see the Aug. 28 review and Sept. 23 review.)

Charting a bullish Q4 start: S&P 500 extends rally from major support 15

Moving to U.S. sectors, the iShares Transportation Average
IYT,
+0.74%

 is acting well technically.

The group initially spiked two months ago, staging a steep early-August breakout. The upturn marked a two standard deviation breakout, encompassing four straight closes atop the 20-day Bollinger bands.

More immediately, the group has asserted an orderly six-week range — a bullish continuation pattern — positioning it to build on the steep August rally.

Tactically, trendline support closely tracks the 50-day moving average, and is followed by the former breakout point (190.00). A posture higher signals a bullish intermediate-term bias.

Charting a bullish Q4 start: S&P 500 extends rally from major support 16

Moving to specific names, Motorola Solutions, Inc.
MSI,
+0.39%

 is a well positioned large-cap name.

Technically, the shares are challenging seven-month highs, rising from a double bottom defined by the May and July lows.

The prevailing tight one-week range signals muted selling pressure near resistance, improving the chances of eventual follow-through. Tactically, a breakout attempt is in play barring a violation of the October low (153.70).

Also notice the pending golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the longer-term trend.

Charting a bullish Q4 start: S&P 500 extends rally from major support 17

Gap, Inc.
GPS,
+0.28%

 is a large-cap retailer coming to life.

As illustrated, the shares have knifed to 52-week highs, clearing resistance matching the September peak. The upturn originates from trendline support closely tracking the 50-day moving average.

Though near-term extended, and due to consolidate, a pullback toward the breakout point (18.40) would offer an attractive entry.

More broadly, the shares are well positioned on the three-year chart, edging atop major resistance matching the late-2019 range top.

Charting a bullish Q4 start: S&P 500 extends rally from major support 18

Finally, Sunnova Energy International, Inc.
NOVA,
+1.96%

 — public since July 2019 — is a mid-cap developer of residential-solar and energy-storage solutions.

Late last month, the shares knifed to record highs, clearing the August peak amid a volume spike.

The subsequent pullback has been underpinned by the breakout point (28.60), placing the shares 14.9% under the October peak.

Tactically, deeper support matches the August and September gaps, circa 27.20. A sustained posture higher signals a bullish bias.

Still well positioned

The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.

Company

Symbol* (Click symbol for chart.)

Date Profiled

Ross Stores, Inc.

ROST

Oct. 5

SBA Communications Corp.

SBAC

Oct. 5

Marvell Technology Group,Ltd.

MRVL

Oct. 5

Qorvo, Inc.

QRVO

Oct. 2

NCR Corp.

NCR

Oct. 2

LGI Homes, Inc.

LGIH

Oct. 2

Amgen, Inc.

AMGN

Oct. 1

SailPoint Technology Holdings, Inc.

SAIL

Oct. 1

Dell Technologies, Inc.

DELL

Sept. 30

Martin Marietta Materials, Inc.

MLM

Sept. 30

Whirlpool Corp.

WHR

Sept. 29

Abercrombie & Fitch Co.

ANF

Sept. 29

American Eagle Outfitters

AEO

Sept. 28

Twitter, Inc.

TWTR

Sept. 28

Blueprint Medicines Co.

BPMC

Sept. 28

Zendesk, Inc.

ZEN

Sept. 23

Datadog, Inc.

DDOG

Sept. 23

Scientific Games Corp.

SGMS

Sept. 23

Maxar Technologies, Inc.

MAXR

Sept. 18

V.F. Corp.

VFC

Sept. 14

Crocs, Inc.

CROX

Sept. 14

Toyota Motor Co.

TM

Sept. 14

Five Below, Inc.

FIVE

Sept. 10

Dow Inc.

DOW

Sept. 10

Eastman Chemical Co.

EMN

Sept. 10

CrowdStrike Holdings, Inc.

CRWD

Sept. 9

Workhorse Group, Inc.

WKHS

Sept. 9

International Paper Co.

IP

Sept. 3

Anaplan, Inc.

PLAN

Sept. 2

Beyond Meat, Inc.

BYND

Sept. 1

Elastic N.V.

ESTC

Sept. 1

Medtronic

MDT

Aug. 28

Celanese Corp.

CE

Aug. 26

Norfolk Southern Corp.

NSC

Aug. 25

Westlake Chemical Corp.

WLK

Aug. 25

Deere & Co.

DE

Aug. 24

PulteGroup, Inc.

PHM

Aug. 24

Expedia Group, Inc.

EXPE

Aug. 24

Johnson Controls International

JCI

Aug. 21

Adobe, Inc.

ADBE

Aug. 20

Canadian Solar, Inc.

CSIQ

Aug. 20

General Motors Co.

GM

Aug. 20

Starbucks Corp.

SBUX

Aug. 18

Builders FirstSource, Inc.

BLDR

Aug. 18

Steel Dynamics, Inc.

STLD

Aug. 17

Elanco Animal Health, Inc.

ELAN

Aug. 17

Brinker International, Inc.

EAT

Aug. 13

Enphase Energy, Inc.

ENPH

Aug. 13

Nike, Inc.

NKE

Aug. 11

Nucor Corp.

NUE

Aug. 11

Freeport McMoRan, Inc.

FCX

Aug. 10

Natera, Inc.

NTRA

Aug. 10

Lennar Corp.

LEN

Aug. 7

McDonald’s Corp.

MCD

Aug. 7

Mastercard, Inc.

MA

Aug. 6

Kansas City Southern

KSU

Aug. 6

Industrial Select Sector SPDR

XLI

Aug. 6

Verizon Communications, Inc.

VZ

Aug. 5

Sunrun, Inc.

RUN

Aug. 5

Penn National Gaming, Inc.

PENN

July 30

Procter & Gamble Co.

PG

July 29

SPDR S&P Metals & Mining ETF

XME

July 28

iShares MSCI South Korea ETF

EWY

July 28

Toll Brothers, Inc.

TOL

July 27

Advanced Micro Devices, Inc.

AMD

July 23

Best Buy Co., Inc.

BBY

July 22

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

iShares U.S. Home Construction ETF

ITB

July 17

Progressive Corp.

PGR

July 17

Livongo Health, Inc.

LVGO

July 17

Roku, Inc.

ROKU

July 16

Cognizant Technology Solutions, Inc.

CTSH

July 16

Consumer Staples Select Sector SPDR

XLP

July 15

Home Depot, Inc.

HD

July 15

Costco Wholesale Corp.

COST

July 15

Air Products & Chemicals, Inc.

APD

July 14

Consumer Discretionary Select Sector SPDR

XLY

July 13

SunPower Corp.

SPWR

July 13

Walmart, Inc.

WMT

July 8

Big Lots, Inc.

BIG

July 1

Tandem Diabetes Care, Inc.

TNDM

July 1

Dell Technologies, Inc.

DELL

June 30

Danaher Corp.

DHR

June 24

RH

RH

June 24

Lowe’s Companies

LOW

June 19

Fiverr International, Ltd.

FVRR

June 19

Etsy, Inc.

ETSY

June 17

HubSpot, Inc.

HUBS

June 8

Square, Inc.

SQ

June 8

United Parcel Service, Inc.

UPS

June 5

FedEx Corp.

FDX

June 3

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

SolarEdge Technologies, Inc.

SEDG

May 29

Synopsis, Inc.

SNPS

May 27

Agilent Technologies, Inc.

A

May 15

Qualcomm, Inc.

QCOM

May 12

Salesforce.com, Inc.

CRM

May 8

Facebook, Inc.

FB

May 7

Spotify Technology S.A.

SPOT

May 5

Dollar General Corp.

DG

Apr. 28

ServiceNow, Inc.

NOW

Apr. 27

Five9, Inc.

FIVN

Apr. 24

Chewy, Inc.

CHWY

Apr. 24

Tesla, Inc.

TSLA

Apr. 23

VanEck Vectors Semiconductor ETF

SMH

Apr. 17

Veeva Systems, Inc.

VEEV

Apr. 17

Okta, Inc.

OKTA

Apr. 16

Target Corp.

TGT

Apr. 16

Invesco QQQ Trust

QQQ

Apr. 14

DocuSign, Inc.

DOCU

Apr. 3

Zscaler, Inc.

ZS

Apr. 3

Apple, Inc.

AAPL

Mar. 27

Nvidia Corp.

NVDA

Mar. 27

Zoom Video Communications, Inc.

ZM

Mar. 19

iShares MSCI Emerging Markets ETF

EEM

Mar. 19

SPDR Gold Shares ETF

GLD

Jan. 2

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.

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