Bullish momentum accelerates, S&P 500 extends to uncharted territory

U.S. stocks have taken flight early Monday, rising amid optimism over a successful final-phase coronavirus vaccine trial.

Against this backdrop, the major U.S. benchmarks have extended an already-aggressive November rally, rising early Monday to tag record highs.

Before detailing the U.S. markets’ wider view, the S&P 500’s
US:SPX
 hourly chart highlights the past two weeks.

As illustrated, the S&P had sustained a steep November rally, asserting a posture atop former gap support (3,482).

More immediately, Monday’s unusually strong start places the index in record territory. Tactically, the September peak (3,588) pivots to support.

Meanwhile, the Dow Jones Industrial Average
US:DJIA
 has sustained a sharp rally from its 200-day moving average.

The index closed last week in slightly negative year-to-date territory — under the 2019 close — though it has briefly tagged an all-time high amid Monday’s aggressive early follow-through.

Similarly, the Nasdaq Composite
US:COMP
asserted a flag-like pattern — the narrow two-session range — to conclude last week.

The bullish continuation pattern punctuates a massive 9.0% one-week rally to start November.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has knifed from major support (10,840), an area closely matching the July peak and the August gap.

Against this backdrop, last week’s close (11,895) marked the Nasdaq’s third-best close on record.

More immediately, the Nasdaq has briefly tagged record highs early Monday. Its record close (12,056.44) and the September peak (12,074.06) remain under siege.

Looking elsewhere, the Dow Jones Industrial Average has knifed from three-month lows to punctuate a successful test of the 200-day moving average.

And here again, the blue-chip benchmark has briefly tagged all-time highs early Monday. Consider that the early session high (29,933) has registered within striking distance of the 30,000 mark.

Tactically, the Dow’s record close (29,551.42) and the February peak (29,568.57) — formerly the record peak — remain under siege.

Meanwhile, the S&P 500 has knifed from major support.

Recall that the October low (3,233.9) closely matched the June peak (3,233) to punctuate a successful retest.

More immediately, the index has extended to record territory early Monday. The S&P’s record close (3,580.84) and the September peak (3,588.11) — both established Sept. 2 — mark areas to track.

The prevailing upturn punctuates a double bottom — the W formation — defined by the September and October lows.

The bigger picture

Collectively, the major U.S. benchmarks continue to take flight, rising amid an unusually strong November start.

Each big three benchmark has tagged all-time highs early Monday, building on last week’s already-massive bullish reversal.

Tactically, recall that the prevailing upturn originates from major support. The S&P 500 has spiked from the June peak (3,233), the Dow Jones Industrial Average has rallied from the 200-day moving average, and the Nasdaq Composite has spiked from its former breakout point (10,840).

Moving to the small-caps, the iShares Russell 2000 ETF
US:IWM
 has also follow-through.

Here again, the small-cap benchmark has tagged record highs early Monday, venturing atop its record close (173.02) and absolute record peak (173.39) established August 2018.

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The prevailing upturn punctuates a bullish island reversal to start November.

Similarly, the SPDR S&P MidCap 400 ETF
US:MDY
 has reached record highs intraday, eclipsing its record close (384.02) and absolute record peak (384.47) established February 2020.

Looking elsewhere, the SPDR Trust S&P 500
US:SPY
 is also acting well technically.

Here again, Monday’s strong start places the SPY in record territory. The prevailing upturn originates from support matching the June peak.

Placing a finer point on the S&P 500, the index sustained its aggressive rally to conclude last week.

Recall that notable floors match the October gap — at 3,482 and 3,500.

Delving deeper, the steep rally originates from support matching the June peak (3,233).

More broadly, the S&P 500 has extended to record territory early Monday. Consider that Monday’s early session low (3,583) has effectively matched the former range top.

Technically, the prevailing upturn, to the extent sustained, punctuates a double bottom defined by the September and October lows.

An intermediate-term target projects to the 3,800 area on follow-through. (The target technically rests at 3,798.)

Beyond specific levels, a potentially consequential break to record territory is underway. All technical trends point higher based on today’s backdrop.

Monday’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.

Drilling down further, the 10-year Treasury note yield
XX:TNX
 has extended its late-year breakout, rising amid a risk-on trade.

The upturn places the yield at five-month highs, and punctuates a successful test of the former range top (0.75), detailed previously.

More broadly, recall that the yield is rising from a good-sized double bottom, defined by the April and August lows. (See the one-year chart.) Follow-through atop the June peak (0.96) would resolve the bullish reversal pattern.

Also notice the pending golden cross, or bullish 50-day/200-day moving average crossover.

Recall that the prevailing breakout places the yield atop its 200-day moving average — a widely-tracked longer-term trending indicator — for the first time since December 2018.

Moving to specific names, Texas Instruments, Inc.
US:TXN
 is a well positioned large-cap semiconductor name. (Yield = 2.6%.)

As illustrated, the shares have reached record highs, clearing resistance matching the October peak. The former range top, circa 155, pivots to support.

Slightly more broadly, the breakout originates from trendline support roughly tracking the 50-day moving average. An intermediate-term target projects to the 170 area on follow-through.

Norfolk Southern Corp.
US:NSC
 is a large-cap railroad operator coming to life. (Yield = 1.7%.)

Technically, the shares have started November with a bullish reversal, rising to challenge all-time highs. Recent persistence near the range top has been punctuated by Monday’s decisive follow-through.

Tactically, the breakout point (225.00) pivots to support. A posture higher signals a firmly-bullish bias.

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Initially profiled April 24, Five9, Inc.
US:FIVN
 has returned 69.5% and remains well positioned.

Late last month, the shares knifed to record territory, rising after the company’s third-quarter results. The initial upturn has been punctuated by pronounced November follow-through.

Though near-term extended, and due to consolidate, the shares are attractive on a pullback. Tactically, the breakout point (156.40) is followed by gap support (152.12).

Snap, Inc.
US:SNAP
 is a large-cap social media name and the parent company of Snapchat.

As illustrated, the shares have recently gapped to record highs, rising after the company’s quarterly results. The subsequent pullback has been flat, and punctuated by stronger-volume follow-through.

Tactically, the breakout point (43.60) is followed by the post-breakout low (38.67). A sustained posture higher signals a firmly-bullish longer-term bias.

Finally, Flex, Inc.
US:FLEX
 is a large-cap Singapore-based contract manufacturer.

The shares initially spiked three weeks ago, rising amid speculation that the company may sell its solar-tracking hardware business. (Technology that helps solar panels track the sun.)

The shares also gapped higher after the company’s quarterly results, released Oct. 29.

More broadly, the shares are well positioned on the three-year chart, rising from a massive double bottom. Tactically, a near-term floor rests in the 15.00-to-15.20 area, matching the former range top.

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

Materials Select Sector SPDR

XLB

Nov. 6

Communications Services Select Sector SPDR

XLC

Nov. 5

Health Care Select Sector SPDR

XLV

Nov. 5

Alphabet, Inc.

GOOGL

Nov. 5

Uber Technologies, Inc.

UBER

Nov. 5

Arena Pharmaceuticals, Inc.

ARNA

Nov. 5

SPDR S&P Biotech ETF

XBI

Nov. 4

Keysight Technologies, Inc.

KEYS

Nov. 4

Harley-Davidson, Inc.

HOG

Nov. 4

Garmin, Ltd.

GRMN

Nov. 4

Pinterest, Inc.

PINS

Nov. 3

Sony Corp.

SNE

Nov. 3

8×8, Inc.

EGHT

Nov. 3

Exact Sciences Corp.

EXAS

Nov. 2

Universal Display Corp.

OLED

Nov. 2

Logitech International S.A.

LOGI

Oct. 27

Dentsply Sirona, Inc.

XRAY

Oct. 27

Maxim Integrated Products, Inc.

MXIM

Oct. 21

Jazz Pharmaceuticals, plc

JAZZ

Oct. 21

The Travelers Companies, Inc.

TRV

Oct. 21

Micron Technology, Inc.

MU

Oct. 20

Vulcan Materials Co.

VMC

Oct. 19

Utilities Select Sector SPDR

XLU

Oct. 19

ON Semiconductor Corp.

ON

Oct. 16

Ford Motor Co.

F

Oct. 15

Texas Instruments, Inc.

TXN

Oct. 15

Skyworks Solutions, Inc.

SWKS

Oct. 14

First Solar, Inc.

FSLR

Oct. 13

Nevro Corp.

NVRO

Oct. 12

Teradyne, Inc.

TER

Oct. 12

SPDR S&P Homebuilders ETF

XHB

Oct. 9

Shake Shack, Inc.

SHAK

Oct. 9

SPDR S&P Biotech ETF

XBI

Oct. 8

Alexion Pharmaceuticals, Inc.

ALXN

Oct. 8

Twilio, Inc.

TWLO

Oct. 8

Cloudflare, Inc.

NET

Oct. 7

Ceridian HCM Holding, Inc.

CDAY

Oct. 7

Gap, Inc.

GPS

Oct. 6

Motorola Solutions, Inc.

MSI

Oct. 6

RSailPoint Technology Holdings, Inc.

SAIL

Oct. 1

Martin Marietta Materials, Inc.

MLM

Sept. 30

Whirlpool Corp.

WHR

Sept. 29

Abercrombie & Fitch Co.

ANF

Sept. 29

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

Crocs, Inc.

CROX

Sept. 14

Five Below, Inc.

FIVE

Sept. 10

Eastman Chemical Co.

EMN

Sept. 10

International Paper Co.

IP

Sept. 3

Anaplan, Inc.

PLAN

Sept. 2

Celanese Corp.

CE

Aug. 26

Westlake Chemical Corp.

WLK

Aug. 25

Deere & Co.

DE

Aug. 24

Expedia Group, Inc.

EXPE

Aug. 24

Johnson Controls International

JCI

Aug. 21

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

Nucor Corp.

NUE

Aug. 11

Freeport McMoRan, Inc.

FCX

Aug. 10

Natera, Inc.

NTRA

Aug. 10

McDonald’s Corp.

MCD

Aug. 7

Industrial Select Sector SPDR

XLI

Aug. 6

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

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

Progressive Corp.

PGR

July 17

Livongo Health, Inc.

LVGO

July 17

Roku, Inc.

ROKU

July 16

Cognizant Technology Solutions, Inc.

CTSH

July 16

Costco Wholesale Corp.

COST

July 15

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

Danaher Corp.

DHR

June 24

Fiverr International, Ltd.

FVRR

June 19

Etsy, Inc.

ETSY

June 17

HubSpot, Inc.

HUBS

June 8

Square, Inc.

SQ

June 8

FedEx Corp.

FDX

June 3

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

Synopsis, Inc.

SNPS

May 27

Agilent Technologies, Inc.

A

May 15

Qualcomm, Inc.

QCOM

May 12

Facebook, Inc.

FB

May 7

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

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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View more information: https://www.marketwatch.com/story/bullish-momentum-accelerates-sp-500-extends-to-uncharted-territory-2020-11-09

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