Bullish/HOLD on S&P500. Deep analysis below
The S&P 500 index has shown notable movements and trends in recent weeks that are crucial to consider for predicting its performance in the upcoming week:
Positive Momentum and Bullish Alignment: The S&P 500 index had a significant gain of 8.92% in November, indicating strong positive momentum. Specifically, the SPDR S&P 500 ETF (SPY) closed above both moving averages, signaling a bullish alignment. The volume was light, possibly due to the holiday season, but the overall trend remains positive. This bullish trend is reinforced by the fact that a significant investor has decided to invest 100% of their pension plan assets in SPY, reversing a previous decision to maintain a cash position.
Technical Analysis and Resistance Levels: Technical analysis suggests that the S&P 500 is approaching a major resistance barrier at 4600. Despite the recent rally, there is a possibility of a pullback, which could offer value. The market is also showing signs of forming a "double top" on the weekly chart, indicating potential for a pullback. However, the 50-Week EMA provides significant support near the 4400 level, suggesting a strong support zone. If the index were to break below these support levels, it could signal a negative turn. Conversely, breaking above the 4600 level could lead to a significant increase, potentially reaching the 4800 level.
Consolidation and Future Trends: Despite the bullish trends, there is an expectation of consolidation into Christmas due to major news expected over the next two weeks. This consolidation period can still be viewed as bullish unless specific conditions are met. Additionally, the S&P 500 chart is bullish in all timeframes, with a peak of 4607 being a critical level to watch. If the index manages to break above this level, it could potentially test the 4637-4662 gap. However, a weak close below 4537 could signal the first sign of weakness.
Recommendation:
HOLD ➡️: Given the current bullish alignment and positive momentum of the S&P 500, along with the significant support levels identified, maintaining a hold position seems advisable. The market is expected to continue its bullish trend, but the upcoming consolidation phase and resistance levels should be closely monitored. It's prudent to wait for clear signals before making further investment decisions, especially considering the potential volatility and the impact of upcoming economic news.
Positive Momentum and Bullish Alignment: The S&P 500 index had a significant gain of 8.92% in November, indicating strong positive momentum. Specifically, the SPDR S&P 500 ETF (SPY) closed above both moving averages, signaling a bullish alignment. The volume was light, possibly due to the holiday season, but the overall trend remains positive. This bullish trend is reinforced by the fact that a significant investor has decided to invest 100% of their pension plan assets in SPY, reversing a previous decision to maintain a cash position.
Technical Analysis and Resistance Levels: Technical analysis suggests that the S&P 500 is approaching a major resistance barrier at 4600. Despite the recent rally, there is a possibility of a pullback, which could offer value. The market is also showing signs of forming a "double top" on the weekly chart, indicating potential for a pullback. However, the 50-Week EMA provides significant support near the 4400 level, suggesting a strong support zone. If the index were to break below these support levels, it could signal a negative turn. Conversely, breaking above the 4600 level could lead to a significant increase, potentially reaching the 4800 level.
Consolidation and Future Trends: Despite the bullish trends, there is an expectation of consolidation into Christmas due to major news expected over the next two weeks. This consolidation period can still be viewed as bullish unless specific conditions are met. Additionally, the S&P 500 chart is bullish in all timeframes, with a peak of 4607 being a critical level to watch. If the index manages to break above this level, it could potentially test the 4637-4662 gap. However, a weak close below 4537 could signal the first sign of weakness.
Recommendation:
HOLD ➡️: Given the current bullish alignment and positive momentum of the S&P 500, along with the significant support levels identified, maintaining a hold position seems advisable. The market is expected to continue its bullish trend, but the upcoming consolidation phase and resistance levels should be closely monitored. It's prudent to wait for clear signals before making further investment decisions, especially considering the potential volatility and the impact of upcoming economic news.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.