Technical analyst: S&P has one hurdle to really blowing away new highs

With the first trading session of the fourth quarter getting underway Monday, BTIG's chief technical strategist, Katie Stockton, said on CNBC that she sees short-term momentum building and possible record highs ahead.

Notching its fourth straight quarterly advance in third quarter, the S&P 500 did narrowly slip in September. But investors should not read too much into last month's decline, Stockton told "Squawk Box."

September's performance was healthy enough, Stockton said, to allow a key technical indicator, the monthly moving average convergence divergence for the S&P, to flip to a buy signal for the first time since February 2015.

"New all-time highs are within reach given only minor resistance near 2,194. Initial support remains in the 2,100 to 2,135 area," she contended. The S&P, as of Friday's close, was about 1 percent away from its record high finish of 2,190.15 in August.

Within the context of an S&P uptrend, Stockton likes transportation stocks. "The transportation sector tends to outperform in a strong bull market, so we have ... downtrend lines and the relative strength ratios for transports starting to turn [positive]."

"I think that's [also] promising," she said.

On bonds, Stockton predicted a multidecade downturn for yields over the long run. But the yield on the 10-year Treasury will continue to see uptrends in the near future, she added.