3900/3930 zone to cap for a lengthier consolidation – Credit Suisse


Economists at Credit Suisse maintain a broader bullish outlook for a move to 3900. With further layers of resistance seen here and stretching up to 3930, the bias remains for 3900/3930 to cap the S&P 500 Index at first and for a potentially lengthier consolidation phase to emerge.

See – S&P 500 Index: Recent comparisons to the tech bubble are misplaced – Morgan Stanley

Key quotes

“S&P 500 has pushed marginally to a new record high, neutralising its bearish ‘reversal week’ and we look for the uptrend to directly extend to our long-held 3900 ‘measured triangle objective’. With further layers of resistance seen here and stretching up to 3930, including trend resistance from last November and a cluster of Fibonacci projection levels our bias remains for a cap in this 3900/3930 zone and for a potentially lengthier consolidation/correction phase to then unfold.” 

“Big picture, we remain of the view that this is likely to be a consolidation phase still within the broader uptrend. Indeed, a direct break above 3930 would end thoughts of consolidation and see the trend stay directly higher, with resistance seen next at 3950/60 and eventually 4070/75.” 

“Support is seen at 3860 initially, then 3837/30, which needs to hold to keep the immediate risk higher. Below can raise the prospect of a ‘false’ break to new highs and a retreat back to the 13-day average at 3809, with scope for price/gap support at 3792/73.”

 



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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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