S&P 500 Index: Break above 4744/50 to clear the way for strength towards 4970/75 – Credit Suisse

The S&P 500 extends its strong recovery. If the index breaks above 4744/50, analysts at Credit Suisse would look for a substantial rise 4970/75.

Price action looks like a bullish “triangle” continuation pattern

“The close above the top of the price gap from Monday morning at 4667/69 adds weight to the view we are seeing the formation of a potential bullish ‘triangle’ continuation pattern. We thus look for a test of the top of the range at 4728/32, beyond which is needed to suggest the consolidation phase is in the process of being resolved higher, for a test of the 4744/50 highs.” 

“Beyond the 4744/50 highs should reinforce the ‘triangle’ and break higher with resistance seen next at 4768 ahead of 4782 and then 4800. Big picture, the ‘measured triangle objective’ (if confirmed) would be seen at 4970/75.” 

“Support is seen at 4672 initially, with 4649/46 now ideally holding to keep the immediate risk higher. A break can see a fall back to key gap and 63-day average support at 4587/68.”