S&P 500 Index: Scope for a deeper but still corrective rally to 3867 – Credit Suisse
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S&P 500 has successfully held key support at 3595. With bullish RSI momentum divergences into the low, analysts at Credit Suisse look for a deeper but still corrective rally to emerge. Big picture though, they maintain a core negative outlook.
“With bullish daily and weekly RSI momentum divergences into the low and with sentiment and breadth measures pointing to a highly oversold condition we see scope for a deeper corrective rally to emerge, or at least a more protracted consolidation.”
“Big picture, our bias remains to view strength as temporary and corrective and we maintain our 3-6 month negative outlook.”
“Resistance is seen initially at 3790/92, above which should clear the way for further strength to resistance next at 3828, then the 38.2% retracement of the August/September fall at 3867. With the 23.6% retracement of the entire 2022 fall just above at 3875 and with the late September high at 3907 we will look for a cap in this 3867/3907 zone.”
“Support is seen at the price gap from yesterday, starting at 3726 and stretching down to 3678. Below this latter level is needed to ease thoughts of a corrective recovery for a retest of the 200-week average at 3595.”
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