Whilst analyst at Credit Suisse have concerns with respect to a lack of momentum, they bias is to continue to give the upside benefit of the doubt still for a break to new highs above 3646 to retest trend resistance from February, today seen at 3675.
See – S&P 500 Index: Three signs of light at the end of the 2020 tunnel – Morgan Stanley
Key quotes
“The S&P 500 has extended its defence of support from its rising 13-day average, now at 3559, for a break above 3629 and a retest of the 3646 high and this in our view marks a bullish ‘pennant’ continuation pattern to reinforce the existing and larger bull ‘triangle’. We do have concerns though, with daily RSI momentum not yet confirming the break higher, never mind the fact that not only the 3646 high remains intact but also clearly key trend resistance from February, currently seen at 3675 and the market is above what we see as its ‘typical’ extreme (15% above the 200-day average).”
“Our bias remains to continue to give the upside the benefit of the doubt still, looking for a break above 3646 for a test of 3675, but with fresh sellers still expected here for now. Through here remains needed to inject momentum to the rally with resistance then seen at 3700 next, then 3720.”
“Support moves to 3627 initially, beneath which can see a move back to 3595/78, which we look to ideally hold. A break though would warn of further sideways ranging, and a fall back to the 13-day average and recent low at 3559/44, which needs to hold to maintain our immediate tactical bullish bias.”
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