Breaking News: Bank of America's Technical Analysis Reveals Bullish Pattern Emerging in Stock Market, Potential Breakout Above 6000 Threshold
In a recent analysis by Bank of America, a significant bullish pattern known as the "cup and handle" is forming in the stock market since mid-July. This pattern, supported by strong market breadth and key technical levels, often signals a breakout in stock prices.
The key resistance zone to watch is between 5650 and 5670, representing the highs from August and July. A decisive break above these levels would confirm the cup and handle pattern, leading to a potential move towards 5930 and 6180.
Additionally, strong market breadth indicators, such as the advance-decline (A-D) lines for both the S&P 500 and Nasdaq 100 hitting new highs, suggest a bullish trend for the major US equity indices.
However, the analysis also warns of seasonal risks in late September, historically a weak period for the stock market. In presidential election years, the first 10 trading sessions of September have shown average losses of -0.42% for the S&P 500.
Despite these risks, the benchmark index closed slightly higher on Monday, while the Nasdaq 100 experienced a slight decline due to pressure on tech stocks.
In conclusion, while there are bullish signals indicating a potential breakout in the stock market, investors should remain cautious of seasonal risks in late September. It is essential to stay informed and monitor key technical levels to make informed investment decisions.