The S&P 500 Index may yet see a deeper corrective rally to test a bunch of resistances, including its 200-day moving average at 4,456/75 (DMA). However, analysts at Credit Suisse expect this zone to remain a major barrier to a further move lower.
Scope for a deeper corrective rally
“While short-term price support at 4.328/23 holds, the immediate risk looks marginally higher for a sustained breakout and deeper corrective rally.”
“We see resistance at 4,412 initially ahead of 4,426/30 and then more importantly at the 200 day average, a 50% retracement of the 2021/2022 drop and price/gap resistance at 4,456/75 . Our bias would then be for a larger top here for the resumption of the broader downtrend.”
“Below 4,323 may alleviate immediate bullish bias, but with a move back below 4,280 needed to see risk back down for a retest of the 4205/4199 major support group – the 23.6% retracement of the entire 2020/2021 uptrend and ‘a neckline’ to a major top.”
Source: Fx Street
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