Breaking News: S&P 500 Breaks Out from Cup and Handle Pattern, Bullish Outlook Ahead
Last week, the S&P 500 broke out from its July-September cup and handle pattern, setting the stage for a bullish trend in the benchmark equity index. According to strategists at Bank of America, maintaining the range of 5670-5650 to 5615 will solidify this breakout with potential upside to 5930 and 6180.
The positive outlook is supported by the rising 50-day and 100-day moving averages near 5520 and 5441, as well as chart support around 5400-5390. Additionally, market breadth strength and new highs in advance-decline lines signal a bullish indicator for key U.S. equity indices.
Last week's interest rate cut by the Federal Reserve boosted investor sentiment, leading to gains in all three major indices. The S&P 500 saw a 1.36% increase, marking its fifth weekly advance in the last six weeks and bringing its 2024 rise to nearly 20%. The Dow Jones Industrial Average rose 1.62%, while the Nasdaq climbed 1.49%.
Fed Chair Jerome Powell's reassurance during the press conference that the rate cut does not indicate any major economic issues, coupled with the Fed's projected future cuts, has further fueled optimism in the market.
In summary, the S&P 500's breakout from the cup and handle pattern, along with positive market breadth indicators and the Fed's accommodative stance, suggest a bullish trend ahead for U.S. equities. Investors should keep an eye on key levels and indicators mentioned to navigate the markets effectively.