Technical Analysis Suggests Bullish Outlook for S&P 500 with Key Technical Levels to Watch

S&P 500

The recent decision by the FED to raise interest rates by 25 basis points was in line with what most analysts had expected. This move, combined with the Bank of England’s recent 50% rate hike, has contributed to a bullish state in US equities.

While the Fed’s action is perceived as dovish compared to the Bank of England’s more aggressive stance, investor optimism remains high. That aspect can be attributed to better earnings and a shift in the banks’ attitudes, which have led to positive sentiment in the stock market.

On the other hand, the ECB is considered to be hawkish, meaning that it may take a more aggressive stance toward interest rates in the future. However, despite these differing views among central banks, investors remain optimistic, keeping an eye on the latest earnings and banking trends.

Technical Analysis of S&P 500

The technical outlook for the S&P 500 is currently bullish, with 68% of the 230 companies in the index reporting earnings that are above analysts’ expectations. The S&P has surpassed the important level of 4100, following a bullish trend that started after the economic downturn in 2022.

The moving average of 200 days has also been positive, indicating an improvement after a weak 200-day moving average in June. These factors combined suggest that the outlook for the S&P 500 remains positive, with investors keeping a close eye on future earnings reports and market trends.

According to recent technical analysis, the S&P 500 has consistently held above the Ichimoku cloud on the daily chart. This Ichimoku cloud, a widely used technical analysis tool in finance, indicates an uptrend in the asset.

The trend has been further confirmed by creating higher highs and higher lows, a pattern known as a higher-top-higher-bottom formation. This bullish trend was further reinforced by a significant price increase earlier in the week, which confirmed the pattern. These technical indicators suggest that the asset will continue to perform well.

According to analysts, the short-term outlook for a particular asset remains bullish, in line with the previous week’s outlook. This optimistic view is supported by key technical levels, including the August high of 4325 and the 2022 record high of 4819.

A move above 4325 would signal a positive shift in the medium-term outlook for the asset, as market participants expect the price to rise in the coming months. If the price continues to climb and clears the 2022 record high of 4819, this would strongly confirm a bull market.

Investors closely monitor the asset and monitor the key levels mentioned above. However, it is crucial to consider other factors, such as economic and fundamental analysis, before making investment decisions.

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