S&P 500 Ranges to Watch After Index Posts File Shut, Greatest Month of 2024

The S&P 500 (SPX) posted a file closing excessive on Friday to cap off its finest month of the yr, because the U.S. inventory market prolonged a post-election rally.

The index gained 5.73% in November, ending the month at 6,032, boosted by optimism that President-elect Donald Trump’s pro-business insurance policies and the GOP’s majority in Congress would bolster financial development and drive company earnings. 

Nonetheless, traders additionally stay cautious about tariffs that might be imposed by the incoming Trump administration, which economists say might rekindle inflation and sluggish the Federal Reserve’s rate of interest cuts.

Beneath, we break down the technicals on the S&P 500’s chart and establish essential ranges that traders could also be watching out for.

Slowing Shopping for Momentum

Since mid-July, the S&P 500 has trended greater inside a rising wedge, a chart sample that seems as an upward-sloping worth channel that includes two converging development strains.

Extra lately, the index tracked in direction of the sample’s higher trendline, although it’s value stating that current power has occurred on declining volumes main into the shortened Thanksgiving vacation buying and selling week.

Furthermore, because the index set a file excessive on Friday, the relative power index (RSI) made a relatively decrease excessive to create a bearish divergence, a chart sign indicating slowing shopping for momentum.

Let’s establish key assist ranges on the S&P 500’s chart to observe throughout pullbacks and in addition use technical evaluation to forecast a measured transfer bullish goal to observe if the index continues trending greater.

Key Assist Ranges to Watch

Upon an preliminary retracement, traders ought to preserve an in depth eye on the 5,870 stage, presently simply above the rising 50-day transferring common. This space on the chart finds a confluence of assist from the October peak, the mid November trough and the rising wedge sample’s decrease trendline.

An in depth under this essential technical stage might see the index decline to round 5,670, a area the place the S&P 500 might encounter assist close to a multi-month trendline that connects a spread related ranges on the chart between July and October.

Measured Transfer Bullish Goal

To forecast a chart-based bullish goal, traders can use a measured moved, also referred to as the measuring precept. 

This system works by calculating the depth of the rising wedge close to its widest level and including that quantity to the sample’s higher trendline. As an example, we add 600 to six,075, which tasks a goal of 6,675, a area that is about 11% above Friday’s shut the place the index might run into overhead resistance, particularly if different indicators flash overbought circumstances on the identical time.

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As of the date this text was written, the creator doesn’t personal any of the above securities.