S&P 500 Price Analysis: The price stopped at a decent support zone but the bulls are not out of the woods just yet

• Equities have recovered somewhat as the S&P 500 trades 1.52% higher.
• There was a decent bounce of a previously touted support area. 

S&P 500 4-hour chart

After Monday’s capitulation, the price of the S&P 500 index has recovered on Tuesday. Yesterday the price of banking and oil stocks took a real beating while staples like P&G and tech names managed to hold up. There has been lots of talk about a 2nd COVID-19 wave and the situation in the UK has been in focus. In the US there has not been too much talk of another lockdown but the government stimulus deal still remains a sticking point.

The chart shows a decent bounce off the resistance zone which formed back in June. The level was pretty stubborn and it took a few tests before the price finally broke through. Now this level has tamed the bears, the next resistance higher up is 3357.24. There is also a flag type pattern to look out for and a breakout to the upside would bring the bulls back to life.

The indicators are still bearish but there are some signs there could be a turn. The MACD signal lines look like they are about to cross over and the Relative Strength Index has picked up off the oversold area. The MACD histogram also looks like it will turn higher as the bars are diminishing. 

Overall it is hard to say if the uptrend is back on. A great sign would be the break of the chart pattern and resistance zone. For now, the near turn resistance is at 3310.00 and a break of this would be a positive sign.

Additional levels