S&P 500 fell reasonably sharply on Monday, however, the market has closed right on the “neckline” to its “head & shoulders” base and above the 38.2% retracement of the recent recovery at 3428/18. Analysts at Credit Suisse believe this zone will act as a solid floor for a turn back higher.
“The S&P 500 fell reasonably sharply on Monday, closing right on the ‘neckline’ to its recently completed base at 3428/27 after holding above the 38.2% retracement of the recent recovery at 3420/18. We continue to look for a solid floor above this zone and for the uptrend to resume.”
“Resistance moves to 3460, above which should now confirm the pullback is over for strength back to 3516/18, then 3550, above which would trigger a move back to the 3588/93 high, which is also the upper end of its ‘typical’ extreme (15% above the 200-day average). Whilst this should clearly be respected, we look for a break in due course, with our ‘measured base objective’ at 3653.”
“Below 3428/18 would throw a serious question mark over the base, with support seen at 3394 next, the 63-day average. Below here would turn the risks back lower within the range and suggest further consolidation.”
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