The S&P 500 was able to extend its rally slightly to a new record high of 4,394 points. There it encountered the rising containment line along the highs of April 16 and May 7. This offered a welcome opportunity for profit-taking, which gained significantly in momentum at the start of the week.
So far on a seasonal course
So far, the index has stuck to our preferred schedule of a weak phase starting in mid or late July in line with the typical seasonal pattern. Overbought technical market indicators, a conspicuously weak market breadth and euphoric sentiment spoke in favor of this medium-term bearish scenario. The price is now testing the support area at 4,240 / 4,258 points, which results from the last intermediate high and the 50-day line. A day close below that would provide confirmation of the favored correction with the next target range of 4,164 points. Below that, there would be downside potential in the direction of 4,057 points.
Chances of a rebound
The extremely oversold situation for a very short time allows a technical recovery from the current support. We see potential recovery goals at 4,289 points and 4,323-4,341 points. Only then would the short-term chart brighten up and a timely renewed test of the record high at 4,394 points would likely.
Note:
Despite careful analysis, Global Investa does not accept any liability for the content, topicality, correctness or completeness of the information provided. The information provided does not constitute investment advice, purchase recommendations or investment brokerage.
So far on a seasonal course
So far, the index has stuck to our preferred schedule of a weak phase starting in mid or late July in line with the typical seasonal pattern. Overbought technical market indicators, a conspicuously weak market breadth and euphoric sentiment spoke in favor of this medium-term bearish scenario. The price is now testing the support area at 4,240 / 4,258 points, which results from the last intermediate high and the 50-day line. A day close below that would provide confirmation of the favored correction with the next target range of 4,164 points. Below that, there would be downside potential in the direction of 4,057 points.
Chances of a rebound
The extremely oversold situation for a very short time allows a technical recovery from the current support. We see potential recovery goals at 4,289 points and 4,323-4,341 points. Only then would the short-term chart brighten up and a timely renewed test of the record high at 4,394 points would likely.
Note:
Despite careful analysis, Global Investa does not accept any liability for the content, topicality, correctness or completeness of the information provided. The information provided does not constitute investment advice, purchase recommendations or investment brokerage.