S&P 500 Index set for the emergence of a triangle consolidation phase – Credit Suisse

The S&P 500 Index has recovered sharply as the market again holds the 4205/4199 support cluster. Analysts at Credit Suisse suspect near-term we can see further consolidation emerge, potentially constructing a “triangle” continuation pattern.

Threat of a large head and shoulders top still present

“Whilst we maintain our broader negative outlook and continue to see risk for the eventual completion of an important ‘head & shoulders’ top we suspect near term we can see further consolidation emerge, potentially constructing a ‘triangle’ continuation pattern.” 

“We look for resistance from the 13-day exponential average at 4313 to cap on a closing basis with support seen at 4223 initially ahead of 4199/98 and then the potential ‘triangle’ bottom at 4171/58.” 

“Below 4171/58 is needed to clear the way for a retest of the late February low at 4115. A clear break below here in due course can see support at the 38.2% retracement of the entire 2020/2021 bull trend and price support at 3855/15.” 

“Above 4313 can see strength extend back to what we continue to look to be tougher price and gap resistance at 4342/63.”