The Technical Indicator: Charting a bullish backdrop as the S&P 500’s wild 2020 ride concludes

Against this backdrop, the S&P 500 has maintained major support (3,646) rising respectably from its second successful retest in as many weeks.

Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +0.03%  hourly chart highlights the past two weeks.

As illustrated, the S&P has pulled in to its range from record highs.

Tactically, major support matches the breakout point (3,646), and is closely followed by the range bottom (3,633).

Monday’s session low (3,636) roughly matched the range bottom. The S&P subsequently registered a bullish reversal to close near session highs.

Meanwhile, the Dow Jones Industrial Average DJIA, -0.36%  remains range-bound.

Still, the index has held relatively tightly to its record high (30,343) in the broad sweep.

Here again, the Dow registered a bullish reversal Monday, closing 461 points off the session low.

Against this backdrop, the Nasdaq Composite COMP, +0.49% is digesting a recent break to record territory.

In the process, the index has registered four straight closes atop its breakout point (12,607), an area defining its first notable floor, also detailed below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has sustained a break to record territory. Consider that 10 of the prior 18 closes have marked record closes going back to late November.

Tactically, first support matches the breakout point (12,607), an area that underpinned Monday’s bullish reversal. Delving deeper, the prevailing upturn punctuates a successful test of the November peak (12,244).

On further strength, a near-term target continues to project to the 12,920 area.

Looking elsewhere, the Dow Jones Industrial Average has sustained a less decisive breakout.

Still, the tight December range is a bullish continuation pattern. Recall that a near-term target projects to the 30,700 mark.

Conversely, the 20-day moving average, currently 30,038, is followed by the former breakout point (29,964).

The Dow has not closed under its 20-day moving average — a widely-tracked near-term trending indicator — since Nov. 4.

Meanwhile, the S&P 500 has pulled in to its former range.

Tactically, recall that the November peak (3,645.99) almost precisely matches the early-December gap (3,645.87).

Monday’s bullish reversal from support punctuated the second recent successful retest. Constructive price action.

The bigger picture

As detailed above, the major U.S. benchmarks are acting well technically.

Though each index has pulled in from its latest record close — established Thursday — the downturn has inflicted limited damage in the broad sweep.

Each benchmark’s intermediate-term bias remains bullish, based on today’s backdrop.

Moving to the small-caps, the iShares Russell 2000 ETF has sustained its latest break to record territory.

Tactically, a near-term floor (191.50) is followed by support matching the November peak, circa 185.40.

Similarly, the SPDR S&P MidCap 400 ETF has sustained its break to a higher plateau.

The prevailing grinding-higher rally is hinged to the initially decisive early-November breakout. Bullish price action.

Looking elsewhere, the SPDR Trust S&P 500 has sustained a less aggressive December breakout.

Still, the prevailing range has been underpinned by its first notable floor at the breakout point (364.40).

Placing a finer point on the S&P 500, the index has pulled in to its former range from record highs.

Tactically, recall that last week’s low (3,645.8) matched the November peak (3,646).

More immediately, Monday’s session low (3,636) registered slightly above the range bottom (3,633) to punctuate a second straight Monday retest of this general area.

More broadly, the S&P’s prevailing downturn from record highs has inflicted limited damage in the broad sweep.

Tactically, the breakout point (3,646) is followed by support in the 3,588-to-3,594 area, detailed previously.

Delving deeper, the ascending 50-day moving average, currently 3,555, is closely followed by the October peak (3,550).

Beyond technical levels, the S&P 500’s latest consolidation phase remains underway. The index is traversing a relatively well-defined December range.

Against this backdrop, the year-end price action will be punctuated by consecutive holiday-shortened weeks — amid likely decreased volume — reducing the chances of a material trend shift.

Broadly speaking, the S&P 500’s intermediate-term bias remains bullish barring a violation of the areas detailed. Last-ditch support currently holds in the 3,550 area.

Also see: Charting a (bullish) holding pattern: S&P 500, Nasdaq nail major support.

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.

Drilling down further, the iShares Silver Trust SLV, -4.12%  — profiled last week — continues to show signs of life.

Technically, the shares have extended a recent trendline breakout, rising to challenge three-month highs. The chart illustrates a double bottom defined by the September and November lows.

Underlying the upturn, the SLV’s relative strength index (not illustrated) has tagged its best levels since early August, improving the chances of eventual follow-through.

Tactically, gap support (23.65) is followed by the mid-month breakout point (22.80). The prevailing rally attempt is intact barring a violation.

More broadly, the SLV is well positioned on the 10-year chart, positioned to build on the massive early-2020 breakout.

JPMorgan Chase & Co. JPM, -0.74%  is a well positioned Dow 30 component. (Yield = 2.9%.)

The shares initially spiked six weeks ago, gapping sharply higher amid vaccine-fueled optimism. More immediately, the relatively tight December range is a bullish continuation pattern.

Tactically, the prevailing upturn has been fueled by increased volume, improving the chances of eventual follow-through. A near-term target projects to the 128.50 area.

Conversely, the prevailing range bottom (118.10) marks well-defined support. A sustained posture higher signals a bullish bias.

Coupa Software, Inc. COUP, +1.49%  is a well positioned large-cap name.

As illustrated, the shares have recently knifed to record territory, clearing resistance matching the September peak. The upturn punctuates a successful test of the 50-day moving average.

Tactically, the breakout point (353.50) is followed by the former range top (337.95). The prevailing rally attempt is firmly-intact barring a violation.

More broadly, the shares are well positioned on the three-year chart, rising from a continuation pattern hinged to the steep early-2020 breakout.

Initially profiled Aug. 20, Canadian Solar, Inc. CSIQ, +8.40%  has returned 80.4% and remains well positioned.

Technically, the shares have staged a strong-volume breakout, reaching 12-year highs.

The upturn punctuates a 10-week range underpinned by support matching the September peak. An intermediate-term target projects to the 55 area.

Conversely, well-defined support matches the breakout point (45.70). The prevailing uptrend is firmly-intact barring a violation.

Finally, PagSeguro Digital Ltd. PAGS, +1.63%  is a large-cap Brazil-based provider of financial technology solutions.

Earlier this month, the shares knifed to record highs, rising from an early-December flag-like pattern.

Though still near-term extended, the nearly straightline strong-volume spike is longer-term bullish, and the shares are attractive on a pullback. Tactically, the post-breakout low (52.10) is followed by the former range top, circa 49.00.

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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.