Over the past month, the S&P 500 has demonstrated an upward momentum, gaining approximately 10.06% from its lows in March 2023. Significantly, the index found a reliable footing at the 50-day moving average on May 5th, 2023, serving as a launching pad to navigate towards the psychological mark of 4150.25. In light of the current trend, a potential revisit of the highs recorded in August 2022 seems increasingly probable. It’s vital to monitor the levels of 4167 and 4267, as a breach of these points might signal a continuing bullish sentiment for the S&P 500. The overarching bullish trajectory is further bolstered by the index remaining above both the 200-day and 50-day moving averages.
Furthermore, a triangle pattern is beginning to emerge near the support level of 4200, which could herald a significant move in the near term. The upper boundary of this pattern around the 4233-price level may provide the first litmus test for the ongoing bullish momentum. Notably, there is a considerable volume accumulation at the 4150.25 level, lending credence to the bullish sentiment. Current positive momentum is further supported by encouraging economic news from the U.S, and the 20-day MA too exhibits a bullish inclination. However, the key level of 4200 might need to be retested before a definite upward journey is confirmed. If the index successfully breaches the upper trendline at the 4230 level, it could set its sights on the next resistance at 4250. In the macroeconomic context, news about U.S. debt ceiling measures and their resolution could have a substantial impact on the index’s trajectory. The proposed cuts by hardliners in the U.S House and the ‘progress’ reported by President Biden’s team in the debt ceiling talks certainly are worth keeping an eye on. Furthermore, U.S Treasury Secretary Yellen’s reassurance about the strength of the U.S banking system provides an additional layer of confidence for the bullish narrative.