S&P 500 is seen at risk to a deeper setback to the “neckline” to its “head & shoulders” base at 3437/33, potentially as far as the 38.2% retracement of its September/October rally at 3420.
See – S&P 500 Index: Earnings per share expected to show V-shaped recovery – NBF
Key quotes
“The S&P 500 is correcting lower following its strong move higher post the completion of a ‘head & shoulders’ base for a test of support from the lower end of its recent price gap at 3482/77. Whilst we have been looking for this to ideally hold, we now think the risk has risen for a break below here for a deeper but still corrective setback to the ‘neckline’ to the base at 3437/33, now also the location of the rising 13-day exponential average, potentially even the 38.2% retracement of the September/October rally at 3420. We look for this to then hold and for the uptrend to resume.”
“Resistance moves to 3501/02 initially, with a break above 3528 needed to suggest the pullback is over for strength back to 3550, above which can see resistance at 3565 next and eventually the 3588 high, also essentially the upper end of its ‘typical’ extreme (15% above the 200-day average). Whilst this should clearly be respected we look for a break in due course with the “measured base objective” at 3653.”
Share
