S&P 500 Forecast: Bear flag breakdown favors re-test of Feb lows

S&P 500 index looks set to revisit the $2,530 (February low), the technical charts indicate. As of writing, the S&P 500 contract for difference (CFD) is seen changing hands at $2,720.

Daily chart

Support: $2,647 (March 2 low), $2,616 (200-day MA), $2,558 (ascending 50-week MA), $2,530 (Feb low).

Resistance: $2,736 (50-day MA), $2,802 (March 13 high), $2,886-$2,880 (upper end of the flag), $2,876 (record high).

• The bear flag or inverted flag breakdown confirmed on March 19 has opened doors for a sell-off to $2,390 (target as per the measured height method).
• The 5-day moving average (MA) and 10-day MA trending lower - indicate bearish setup. The 50-day MA and 100-day MA have shed bullish bias (topped out).
• The relative strength index (RSI) is flat-lined, but below 50.00 (biased bearish).

View

• The index will likely revisit $2,530 over the next 4-5 weeks and may extend the drop further towards $2,390 (target as per the bear flag breakdown).
• On the higher side, only a close above the 10-day MA would signal bearish invalidation, while a move above $2,802 (March 13 high) would signal a bearish-to-bullish trend change.