Break above 4299 boosts likelihood of further consolidation – Credit Suisse

The S&P 500 has seen a strong rally above near-term resistance from its 13-day exponential average and recent high at 4299 and on increased volume. This supports the idea of ​​a longer consolidation phase, which could still evolve into a bearish “triangle” pattern, Credit Suisse analysts report.

Next key stress test seen at 4363/87

“The S&P 500 has cleared key short-term resistance from its 13-day exponential average and recent high at 4299 and on increased volume. This keeps thoughts of a longer consolidation phase going and makes it a deeper rally, which could still eventually evolve into a bearish continuation “triangle” pattern.

“Resistance is seen next at the top of the early March price gap at 4363, then the 38.2% retracement of the 2022 drop and the early January downtrend at 4384/87. Our bias is to try to look for a ceiling here for now to define the top of the potential “triangle”.

“Above 4387 would suggest that the recovery may extend to the March high of 4417, potentially what we expect to be much tougher resistance at the 200-day average at 4468.”

“Support is initially seen at 4323, then the 13-day exponential average at 4288/84. Below 4252, however, it is necessary to see risk drop again for a return to recent lows at 4173/58.

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