Now that it’s 100+ points higher, a channel seems to be emerging on the chart. Its top is in the 2950-2980 zone from late April and earlier this week.
If the bulls run out of energy here, traders may want to look for a sideways move – possibly for the next 1-2 months.
After all, the bigger trend is neutral at best. Prices are consolidating under the 200-day ( ) and the 100-day .
So if we test back down the channel, where’s support?
The 2820 zone has been important this month. (And apparently surprised the bears.) However buyers may want to look a little lower to the 2729 area from June 2019. This is also near the 50-day (which has now swung back to the upside). If bearishness and return, the range could widen.
Consolidation also makes sense fundamentally as investors wait to see how quickly the economy recovers. The data is still weak, and likely to remain ugly with monthly payroll data the first week of June. There have also been renewed geopolitical tensions involving China.
All of that suggests more sideways movement, with the potential for more into early June.