Big Tech Supports S&P 500 as Renko Divergence Warns of Possible Pullback

Big tech is still doing the heavy lifting as the rotation back into tech is in motion. NVDA is up 2.12%, MSFT up 2.04% and AAPL up 0.51%. Also, TSLA is up 2.47%, which is helping to keep the index from turning really negative.

Some heavy hitters today include QCOM (+6.95%), APP (+7.83%) and PANW (+5.70%). There doesn’t seem to be any major decliners at the time of writing. QCOM’s increase appears tied to renewed AI and data-center enthusiasm, OpenAI-related chip reports, stronger automotive revenue momentum and recent earnings support. Additionally, APP’s surge is linked to a Q1 earnings beat, strong ad revenue growth and Goldman raising its price target. PANW is catching a sympathy bid after Fortinet’s strong results cooled fears around AI disruption.

QCOM, APP & PANW Stand Out Above 5.5%

SPX Heat Map

Source: TradingView

S&P 500 Renko Rally Stalls Near 7,400

Some bearish divergence is starting to kick in for the S&P 500 Index when we look at the Renko chart with 15 bricks. Both the RSI and Z-Score SMA have turned lower while the bricks were increasing for a bit. Additionally the RSI crossed under its Overbought level. This indicates that there may be some cooling off for the Index. Nonetheless, the S&P 500 Index remains in a long-term trend as observed by its distance above the 500-SMA.

SPX 500 12-Brick Renko Showing Cooling Momentum

SPX 12-Brick Renko

Source: TradingView

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Support Levels: 6,525, 7,000

Resistance Levels: 7,450, 8,150

Medium Term Path: Some vulnerability in the S&P 500 now but not too much. All part of major uptrend moves and not necessarily a change in trend. Initial support is at the positive Supertrend, but if it flips, expectations are for support around the 7,150 price level. Target for 7,450 is still intact with a further medium term level at 8,150.