The S&P 500 and other major US indices continued their rise into record territory as the financial markets continue to shun the impact of the coronavirus outbreak, which has so far killed more than 1,100 people.
All three major indices are higher, with the S&P 500 index hitting 3378.8 to eclipse last week’s record of 3360. This continued rise in the price levels of the US markets comes as the number of suspected cases appears to be declining, and global spread/death toll continues to stay muted. These gains followed those of the Asian markets, which surprised to the upside.
The Chinese government has rolled out several stimulus measures, and the Fed has also said it is watching the situation very closely.
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Technical Outlook for S&P 500 Index
On the 4-hour chart, we notice that price broke out of the bullish flag pattern but found it hard to break the 3376.4 price high, which was achieved in yesterday’s trading session. This morning’s trading session saw the futures asset pull back to the fractured flag border, from where it has mounted the offensive action of today to take into record territory.
The expectation of pattern is for the breakout to complete the measured move, taking the S&P 500 to the 3386 price area. I would expect the S&P 500 to find resistance somewhere between 3380 to 3390.
On the flip side, the price may pull back to the immediate support at 3354 if the upside move suffers from exhaustion. 3335.7 and 3299.7 are the support areas which follow and could assume relevance if a selloff continues on a larger scale.
The oscillator continues to approach the overbought area but is not quite there yet. I would be looking for a failure swing, which could produce lower highs on the indicator in the presence of higher highs for the initiation of the pullback move.
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