Can Shares Proceed to Rally?

S&P 500 Value Forecast:

S&P 500 Value Outlook: Can Shares Proceed to Rally?

The S&P 500 shot to new data Monday because it regarded to increase the bullish value motion loved within the first week of February. With fiscal assist within the works and earnings from the most important expertise corporations accomplished for the quarter, the elemental basis of US equities stays sturdy headed into the second half of the month. Single-stock volatility could persist as earnings from different firms trickle in, however the broader market development stays greater at the moment.

Supply: IG

To that finish, the S&P 500 simply posted an encouraging candlestick formation which may recommend additional positive aspects are in retailer after the index rallied final week. Seen on the weekly timeframe, a bullish engulfing candle – typically seen as a sample indicating an imminent reversal on the backside of a downtrend – may trace extra positive aspects are on the horizon.

S&P 500 Value Chart: Weekly Time Body (January 2018 – February 2021)

Within the shorter time period, a close-by trendline narrowly overhead may supply some semblance of resistance. That stated, the S&P 500 enjoys a bounty of assist beneath that may look to push back a deeper pullback.

S&P 500 Value Chart: 4 – Hour Time Body (September 2020 – February 2021)

Additional nonetheless, IG shopper sentiment knowledge reveals retail merchants stay net-short the index. Since we sometimes take a contrarian view to crowd sentiment, positioning suggests the S&P 500 could proceed to rise. Within the meantime, observe @PeterHanksFX on Twitter for updates and evaluation.

–Written by Peter Hanks, Strategist for DailyFX.com

Contact and observe Peter on Twitter @PeterHanksFX