GNRC still in a bottoming process

We highlighted the potential for Generac (GNRC) to break out from a big base in our October 17 The Stock Pulse. GNRC has struggled since then but remains within this base-building (aka bottoming) process dating back to late 2022.

The August to November pullback to 137.60 defended the 61.8% retracement of the April to August rally, keeping the potential bullish cup and handle pattern in place. Stability near the 13-, 26-, 40-, and 200-week moving averages from 168 down to 152 is reinforcing the developing of the handle with tactical upside potential back to the neckline of the big base pattern near 195.94-203.25. The 61.8% extension of the rally from the April cup low to the August handle high projected from the November handle low converges with this resistance.

If GNRC can surpass the 195.94-203.25 range, it would confirm its big base and suggest further upside to 241-250 (100% extension and 38.2% retracement of the November 2021 to November 2023 decline), 302-325 (50% retracement and pattern counts), and potentially toward 354 (61.8% retracement). Until then, continuing to defend the weekly moving averages from 168 to 152 would maintain a constructive bias.

GNRC is also building a big base relative to the S&P 500.

Chart 1: Generac (GNRC): Weekly chart

Chart 2: Generac (GNRC) (top) and relative to the S&P 500 (bottom)