The S&P 500 rallied on Friday, but will it break above the previous highs?
The broad stock market index gained 1.85% on Friday as it retraced most of its recent declines following a better-than-expected monthly jobs data release. On Thursday the index fell to the local low of 4,048.28 and on Friday it traded as high as 4,147. Last week on Monday the S&P 500 was the highest since February 2.
Stocks are expected to open 0.1% higher today. The index will likely fluctuate along its Friday’s closing price as it may see a short-term uncertainty and some profit-taking action. Last week the S&P 500 bounced from the important 4,200 resistance level again as we can see on the daily chart:
Futures Contract Extends a Consolidation
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading above the 4,150 level. The resistance level remains at 4,160-4,200, and the support level is at 4,120, among others.
Conclusion
The S&P 500 index will likely open relatively flat this morning. The market is expected to fluctuate following its Friday’s rally. For now it looks like a further consolidation after March-April advances.
Here’s the breakdown:
- The S&P 500 retraced most of its recent declines on Friday, but it is still trading below the previous highs.
- The market extends its few-weeks-long consolidation.
- In my opinion, the short-term outlook is bullish.
Thank you.
Paul Rejczak,
Stock Trading Strategist