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Michael Ashbaugh

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Nov. 24, 2020, 12:33 p.m. EST

Charting a bullish technical tilt: Dow 30,000 and Nasdaq 12,000 under siege

Focus: Semiconductor sector presses record territory, Homebuilders stealth breakout attempt, Tesla extends triangle brekout, SMH, XHB, TSLA, KO, MCHP

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By Michael Ashbaugh, MarketWatch

Editor’s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

Technically speaking, the U.S. benchmarks continue to rise amid bullish market rotation and expanding sector participation.

Against this backdrop, two round-number milestones are under siege early Tuesday — Dow 30,000 and Nasdaq 12,000 — as each benchmark builds on already firmly-bullish November price action.

Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +1.39%  hourly chart highlights the past two weeks.

As illustrated, the S&P is digesting the steep early-November rally.

Tactically, a near-term floor matches the October peak (3,550) and is followed by the post-breakout low (3,512).

Conversely, the September peak (3,588) marks an overhead inflection point and is followed by the S&P’s record close (3,626.9).

Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.83%  is traversing a range-bound backdrop.

Tactically, overhead inflection points match the Dow’s record close (29,950.44) and absolute record peak (29,964.29). Both areas are under siege early Tuesday.

Against this backdrop, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +1.97% has flatlined, asserting a tight six-session range.

This is the only major U.S. benchmark not to register a record close last week.

Against this backdrop, major resistance remains slightly more distant, areas better illustrated below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq is traversing the November range. The prevailing upturn punctuates a successful test of major support in the 11,450-to-11,460 area.

Conversely, the range top marks significant resistance. Overhead inflection points match the October peak (11,965) and September peak (12,074), formerly the Nasdaq’s all-time high.

Also see the Nasdaq’s record close (12,056.44), established Sept. 2. To reiterate, the marquee 12,000 mark is under siege early Tuesday.

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

To reiterate, the prevailing flag-like pattern positions the index to build on the steep early-month rally.

Tactically, notable floors match the September peak (29,199) and gap support (29,127), areas that underpinned last week’s pullback.

More broadly, the prevailing upturn punctuates a bullish double bottom — defined by the September and October lows — and originates from the 200-day moving average.

Similarly, the S&P 500 has staged an orderly pullback from its record close, established last week.

Here again, the prevailing flag pattern punctuates a well-defined double bottom. Recall that the November rally originates from major support (3,233).

The bigger picture

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

On a headline basis, the S&P 500 and Dow industrials have sustained early-November breakouts — asserting bullish flag patterns — while the Nasdaq Composite remains range-bound.

More immediately, the Dow Jones Industrial Average has tagged the 30,000 mark early Tuesday for the first time on record.

Perhaps not surprisingly, each benchmark’s intermediate-term bias remains firmly bullish.

Moving to the small-caps, the iShares Russell 2000 ETF has extended a break to record highs.

The prevailing upturn punctuates last week’s unusually tight range, a backdrop signaling muted selling pressure.

Similarly, the SPDR S&P MidCap 400 ETF has extended its November breakout.

/zigman2/quotes/210599714/realtime
US : S&P US
3,851.85
+52.94 +1.39%
Volume: 2.34B
Jan. 20, 2021 4:58p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,188.38
+257.86 +0.83%
Volume: 384.98M
Jan. 20, 2021 4:58p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
13,457.25
+260.07 +1.97%
Volume: 6.31M
Jan. 20, 2021 5:16p
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