The S&P 500 has gapped sharply higher above price/gap and moving average resistance at 3390/95 to add further weight to the view the index is seeing the construction of a large bull “triangle”, with key resistance seen at 3525/50, per Credit Suisse.
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Key quotes
“The strong recovery in the S&P 500 continues with the market gapping higher to clear key flagged resistance test at 3390/95 – the 13 and 63-day averages and the top of the price gap from Wednesday last week – and this adds weight to our broader view we are seeing the formation of a large bullish ‘triangle’ continuation pattern.”
“We look for the strong tone to be maintained for now for a move to 3502 next, then the top of the ‘triangle’, seen starting at 3525 and stretching up to the 3550 October high. Our bias would be for this to then cap again for now for a fresh swing lower in the ‘triangle’. Above 3550 is needed to suggest the ‘triangle’ is already completed for a move back to the 3588 record high.”
“Support is seen at 3429 initially, then the price gap from yesterday morning, starting at 3405 and stretching down to 3389/88, which we now look to try and hold to keep the immediate risk higher in the range.”
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