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.”
“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.”
“The defense of 3636 would be crucial for the continuation of the upward movement.”
Source: Fx Street
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