Technical Analysis – US 500 index posts fresh 9-month peak

The US 500 stock index (cash) has been in an uptrend since mid-March, slicing through crucial technical regions such as its 50- and 200-day simple moving averages (SMAs). In addition, the index jumped to a fresh nine-month high of 4,232 in today’s session before paring some gains.

The short-term oscillators are endorsing the latest upside move. Specifically, the MACD jumped above its red signal line in the positive region, while the RSI is flatlining above its 50-neutral mark.

Should the price attempt another advance, the nine-month peak of 4,232, which overlaps with the July 2021 bottom, could act as initial resistance. Conquering this barricade, the bulls might then challenge the October 2021 low of 4,270. A violation of that zone could open the door for the August 2022 high of 4,325.

On the flipside, if the index experiences a pullback, immediate support could be found at 4,146, which is the 78.6% Fibonacci retracement of the 4,325-3,489 downtrend. Piercing through that wall, the price could challenge 4,100 before the double-bottom region of 4,048 comes under scrutiny. A break below the latter may trigger a retreat towards the 61.8% Fibo of 4,006.

In brief, the US 500 index stormed to a fresh nine-month high amid some positive developments regarding the US debt-ceiling negotiations. However, a downside correction should not be ruled out as the latest advance pushed the price above its upper Bollinger band, indicating that it approached overbought conditions.

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