S&P 500 Index to resume the uptrend after testing support at 3420 – Credit Suisse

S&P 500 is holding support as expected from the “neckline” to its “head & shoulders” base at 3437/33 and the Credit Suisse analyst team bias remains to view weakness as corrective ahead of an eventual challenge on the 3588 record high.  

See – S&P 500 Index: Earnings per share expected to show V-shaped recovery – NBF

Key quotes

“The S&P 500 has seen its expected fall to test and hold support from the ‘neckline’ to its base at 3437/33, also the location of the rising 13-day exponential average, and whilst we would still not rule out a test of the 38.2% retracement of the September/October rally at 3420 we continue to look for a floor here and for the uptrend to then resume.” 

“Resistance remains at 3501/02 initially, with a break above 3528 needed to suggest the pullback is over for strength back to 3550, above which can see resistance at 3565 next and eventually the 3588 high, also essentially 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 the ‘measured base objective’ at 3653.” 

“Below 3420/18 would throw a serious question mark over the base, with support seen at 3396 next.”