Charts to Watch: SPX, FIG, ZS

**Nicole** (0:00)
Charts to watch, it's time now, and we have Rachel Dashiell with us, Head of Technical Research and Strategy at Schwab Center for Financial Research. And we're taking a look here at the S&P 500 All four of the major averages, in fact, are having a winning month. What stands out to you when you look at the levels on the S&P, Rachel?

**Rachel Dashiell** (0:19)
Yeah, great to join you, Nicole. So I think that healthy momentum reset that you and I discussed last week appears as though it may carry into this week, and really critical support around those former highs, around 7,600, 7,620 area, that remains intact for now. Momentum to the downside appears to be accelerating after price just as last week hit its head at near-term resistance of that former gap around 7,745. So I think it wouldn't be out of the question for traders to expect price to really retest that former polarity zone around that 7,620 zone.
Now, I think a lot of eyes are going to be on the breakout moves and rates today, especially with the moves with the dollar. I put one of these on this chart to just show the correlation between the US dollar index and equities. It's at one year extreme and typically when you see correlations get to some of those extremes, Nicole, historically it has led to some unwinding or decoupling of that pair, and historically it has showed that they may mark turning points in the dollar index. So if the dollar index breaks lower, I think that's a good sign for equities here from the overall index standpoint and further kind of risk embracing behavior in the market.

**Nicole** (1:43)
Okay, so we'll watch the dollar for that. Thank you for that. What about Figma, which has been down, it's had a down arrow down around 60% year over year, but gained in August. What were your thoughts on the technicals?

**Rachel Dashiell** (1:56)
Yeah, like you said, it's been a downturn for most of the year. Now, there's been a constructive repair phase that's almost completed, and I think this speaks to the rotation that we've seen out of semiconductors and into software because this chart is looking pretty familiar and similar to the software chart. So this is a five-month-long double bottom forming with old support at 16, now new resistance around 28, and I would say some traders may say that they've received confirmation already of a breakout with those two closes above resistance, but it looks like price is just doing a classic kind of retest of support right now. I'd say, and a lot of traders would probably look at closing that gap from yesterday to kind of give them additional confirmation of a support balance here, but it does look like there is a favorable risk to reward here in this software name with that anchor VWAP from the all-time highs up right underneath the price around 26.5 as a level of managed risk and then a couple of Fibonacci levels to the upside. The first set that classic profit-taking zone around 161.8% retracement around 35, and the second would be that full measured move to 40 I would say, last thing, the ADX trough here is really signaling that whichever way the market is going to break, here our resistance tells us that the market is going to trend.
Traders should keep an eye on those levels.

**Nicole** (3:19)
Last but not least, we're watching Zscaler, which had a nice month here, up about 25 percent this month as we wrap it up, and a winning day today. What stands out in this chart?

**Rachel Dashiell** (3:32)
This one is going to look almost identical to the last chart that we saw here, Nicole. This is in fact a six-month-long double bottom. It's really found its way across Anchor VWAP support. You can see that recent bounce around 165, that traders have a level to manage their risk against, and Zscaler still hasn't broken through the neckline yet, around that 190 zone there, and earnings on this coming Thursday could definitely be a catalyst to possibly send it higher. I would say there's a couple of hints to that possible move, one being the software space in general, seeing rotation and breakouts holding there.
I would say also momentum isn't a bullish regime, looks as though that downside momentum is waning with that latest pullback to short-term support. So odds could be favoring a move here to the upside. So just again, risk could be down at that anchored VWAP around 165, which could eventually be moved up with the price of the stock. And then there's some profit targets would be that 161.8% Fibonacci retracement around 234, we're in that full measured move even further towards 262 here, Nicole.