S&P 500 Extends Gains as Optimism on the Coronavirus Pandemic Lingers. Can It Hold On?

Dow Jones S&P 500
S&P 500

Like other major indices, the S&P 500 is trading higher in today’s trading. As of this writing, the stock index is up by 1.93% or 51.32 points at 2,715.0.

Stocks of the embattled drug company Mallinckrodt is today’s biggest winner so far. It is up by over 23% following news that it was able to secure enough funds to cover $495 million worth of debt. Second in leading gains in today’s trading is the tour operating company Royal Caribbean Cruise with an uptick of over 17%. In third is  Nobel Energy with a 5.10% profit.

Risk appetite has been fueling the rally across equities markets. Investors have been clinging to hope brought about by declining rate of coronavirus cases and deaths. The question is, how long will the rally on S&P 500 last?

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S&P 500 Outlook

On the hourly time frame, it can be seen that S&P 500 has been on a sharp rally. It’s now testing support on the rising trend line from connecting the lows of April 3 and today’s Asian session lows. If support at its current levels, around the 2,700.00 handle, hold, we could see the stock index extend its rally even further. It could head to the near-term resistance at 2,885.0 where it topped on March 10.

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Alternatively, it’s worth pointing out that on the 4-hour time frame, the S&P 500 CFDs is testing the 200 SMA for resistance. If sellers outpace the buyers, we could see the stock index fall to support at 2,753.50 which coincides with a medium-term trend line (from connecting the lows of March 23 and April 3).More content