The S&P 500 index soared by more than 2.50 per cent as the market reacted to several positive news and ignored a few warnings.
S&P 500 soars on positive Moderna results
Moderna was among the best performing stocks in premarket trading after the company reported positive results from its closely watched Covid-19 vaccine. The company said that most participants in its trial had positive results. The clinical trial study involved giving participants several doses of the drug through intramuscular injection about 28 days apart. Most of the participants achieved levels of the antibodies that are similar to people who have recovered from the disease. In a statement, the company said:
“These interim Phase 1 data, while early, demonstrate that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection starting with a dose as low as 25 .”
Still, with so many vaccines being in development, there is a need to question whether it will work. Remember, this vaccine is in its early days and it will need to go through months of trial. Also, with so many companies coming up with a vaccine, how profitable will it be for Moderna?
Higher crude oil prices
The S&P 500 also rose due to higher oil prices. The price of West Texas Intermediate (WTI) and Brent rose by more than 8 per cent and 6 per cent respectively. The two benchmarks are trading at their highest levels in the past month. Higher oil prices are usually better for the S&P 500 because they remove the risk of bankruptcies in the energy industry. Widespread bankruptcies would affect other sectors in the index. The rise of commodities like copper, soybeans, and corn also helped the rally.
The S&P 500 index rose to an intraday high of $2,930. On the daily chart, the price is along the 61.8% Fibonacci retracement level. It is also inches above the 50-day and 100-day moving averages. The price is also above the Ichimoku cloud. Therefore, the price may continue rallying as the bulls remain in control. In this case, the bullish rally will accelerate if the price is able to move above the previous high of $2.970.
On the flip side, a move below 2770 will invalidate this prediction. This price is along the 50% retracement level and along the lowest level of the hammer pattern made on April 14.