S&P 500: Technical Analysis

Investors enthusiastically welcomed the efforts of the Fed and the US government to support the US economy and population – US stock indexes completed last week with a record increase. The S&P 500, for example, grew by 15%, to 2530.0, DJIA – by 17%, to 21540.0. For US stock indices, last week was the most successful since 1938.

Earlier in mid-March, the ECB leadership introduced a new program for the purchase of Eurobonds in the amount of 750 billion euros in addition to the two ongoing quantitative easing programs – a regular monthly purchase of assets worth 20 billion euros and the announced “antivirus” tranche of purchases with a budget of 120 billion euros, which to be spend before the start of summer. In total, the ECB will buy in sum 1,11 trillion euros in asset markets this year.

Participants in the financial market cannot but take into account the joint actions of world central banks, which sharply softened monetary policy, as well as the record filling of the financial market with cheap liquidity.

It’s too early to talk about the turning point in the negative trend in the US and global stock indices. Investors are still under stress amid the coronavirus pandemic and the collapse of the global economy.

Nevertheless, the first signals appeared to resume purchases, which should not be ignored. On the 1-hour chart of the S&P 500, the price broke through an important short-term resistance level (EMA200) near 2500.0.

A return of the index to the zone above resistance levels of 3000.0 (ЕМА200 on the daily chart), 3020.0 (Fibonacci level 23.6% of the downward correction to the growth since February 2016 and from the level 1807.0) will indicate a resumption of the bull trend.

However, a breakdown of the support level of 2500.0 will be a signal for the sale of the S&P 500.

Support Levels: 2500.0, 2415.0, 2319.0, 2240.0, 2180.0, 2020.0, 1900.0, 1807.0

Resistance Levels: 2600.0, 2685.0, 2790.0, 2940.0, 3000.0, 3020.0 Trading Recommendations

Sell ​​Stop 2465.0. Stop-Loss 2580.0. Goals 2415.0, 2319.0, 2240.0, 2180.0, 2020.0, 1900.0

Buy Stop 2580.0. Stop-Loss 2465.0. Goals 2600.0, 2685.0, 2790.0, 2940.0, 3000.0, 3020.0

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