The S&P 500 surged higher following its bullish ‘outside day’ for a clear move above 4200 but with strength for now having been capped at potential trend resistance from mid-April, today seen at 4240. The index needs to move above this latter level to end thoughts of a consolidation phase for a direct resumption of the core bull trend, in the view of the Credit Suisse analyst team.
Key near-term support is seen at 4203/02
“A move above 4240 is needed in our view to confirm a conclusive break higher to end thoughts of a broader consolidation phase, with Fibonacci projection resistance seen next at 4256/60, which we would look to cap at first. Big picture though, we would look for a move to 4350.”
“A fresh rejection from 4238/40 followed by a fall and close below the price gap from Friday at 4203/02 would mark a false break higher to reinforce our scenario for a lengthier consolidation phase. Support would then be seen next at the 13-day exponential average at 4180 and with more important price and uptrend support seen at 4147/41.”