The S&P 500 just set an intraday record Thursday. For doubters thinking the rally is just a last gasp of the decadelong bull market, analysts who study charts to make buying and selling decisions believe there is more room to run.
From market breadth to the breakout from a so-called flag pattern to the number of times major indexes have tested resistance levels, there are technical indicators pointing to more upside for the stock market.
“One indication that gets overlooked which is really, really bullish historically is the expanding number of 52-week highs and that number was over 23% back about two weeks ago,” said Jeff DeGraaf, founder and chairman of Renaissance Macro Research. The number of S&P 500 constituents that have hit new 52-week highs is an indicator of market breadth.
“Yesterday we saw a positive reaction to the Fed announcement and it confirmed a short-term breakout from a consolidation phase that we call a flag pattern. The flag pattern tends to see an immediate upside follow-through,” said Katie Stockton, founder and managing partner at Fairlead Strategies.
If Thursday’s rally holds through Friday, the breakout would be “a big deal” from a technical perspective and would prompt higher price targets, Stockton added. The S&P 500 surged nearly 1%, hitting a record intraday high of 2,956.20 on Thursday.
Source: CNBC
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