The S&P 500 breaks a key technical level as the uptrend continues on vaccine hopes

Fundamental backdrop

The news that the AstraZeneca and Oxford university vaccine trial has produced some promising results sent the major bourses higher on Monday. In the UK, AstraZeneca shares rocketed 10%, but then gave up most of those gains, to close up 1.45% on the session. In the US, tech firms top the list in the S&P 500 as Amazon, Citrix systems and Adobe are all in the top five performing companies. In terms of volume Pfizer is the most traded company, while Microsoft are a close second.

It's another big week for earnings as there are 88 companies reporting from the S&P 500 and another 76 from the STOXX 600 in Europe.  In terms of the highlights, The Coca-Cola Company, Microsoft, Tesla, Twitter, Verizon, T-Mobile and American Express all have updates this week.

S&P 500 daily chart

Looking at the S&P 500 chart, the previous wave high has now been broken to the upside. This could now lead the way for the price to go and test the pre-COVID-19 highs. Since the blue trendline broke that has not been a test so it is possible that the price may pullback to come and re-test the area. There is a gap on the chart that the bulls might also be targeting at 3328.45. This is where the price really accelerated lower after the coronavirus really took hold of the markets. Lastly, looking at the technical indicators they are now very much bullish. The Relative Strength Index is heading to overbought zones but there is still room to the upside. The MACD histogram is in the green and the signal lines are firmly above the zero level. 

Additional levels