S&P 500: Bounce could extend above 4000 if it breaks 3900 zone – SocGen

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The S&P 500 rebounded 2.6% on Monday, after falling to a year low late last week. Periodic bounces are to be expected, but the 3,900 level is going to be a tough barrier, analysts at Société Générale report.

Holding 3636 is crucial to persist in the upside move

“The S&P 500 briefly breached June lows at 3636, but has quickly rallied above it, denoting a false breakout. It should be noted that similar price action occurred in June, when the index failed to settle below the May low and experienced a rebound phase.”

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“The gap to the upside on the daily chart points to the possibility of a bounce.”

“The recent pivot high at 3900 is the first layer of resistance. If crossed, the bounce could extend into the recent bearish gap near 4040 and 4120.”

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“The defense of 3636 would be crucial for the continuation of the upward movement.”

Source: Fx Street

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