S&P 500 Index holds key 3,855/15 support cluster, arguing for further consolidation – Credit Suisse
|S&P 500 posted a late bullish “hammer” reversal into the close on Friday to hold above the key 3,855/15 support cluster. This reasserts the potential for further short-term consolidation over the next few days, but the broader risk is still biased lower, in the view of analysts at Credit Suisse.
Eventual break under 3,855/15 can see support at 3,505/00
“S&P 500 has resultantly formed a bullish ‘hammer’ candlestick reversal and with a short-term bullish momentum divergence now in place, and with US Bond Yields and the USD stabilizing, all this reasserts the potential for a short-term phase of consolidation.”
“Key resistance is seen at the falling 13-Day Exponential Moving Average, now at 4,002. Whilst below this level, this will just stay seen as a low-level consolidation, with medium-term downside momentum staying strong. Therefore, the risk of an eventual breakdown stays seen as elevated, with the next key support level at the cluster of price lows around 3,723/3,694 and eventually down to 3,505/00.
“Key resistance stays at the aforementioned 4,002 13-day EMA. A break above here would open up a deeper corrective recovery, with resistance then seen at 4,091/4,128.”
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