S&P 500 Moves Towards 4000 As Risk Appetite Grows

Key Insights

• The strong performance of energy and tech stocks pushed S&P 500 towards new highs. 
• The weak U.S. dollar provided additional support to stocks.
• A move above the 4000 level will push S&P 500 towards the resistance at 4015.

Stocks Are Moving Higher Ahead Of The Weekend

S&P 500 made an attempt to settle above 3990 but lost momentum and pulled back towards the 3970 level as traders decided to take some profits off the table. The tech-heavy NASDAQ Composite was up by roughly 1.5% as tech stocks continued to move higher.

It looks that the weak Consumer Sentiment report provided additional support to markets as the slowdown in consumer activity may lead to a less hawkish Fed.

Basic materials and energy stocks were moving higher today as the rebound in commodity markets continued. Occidental Petroleum, Phillips 66, and Devon Energy were among the biggest gainers in the energy segment.

Tech stocks continued to move higher, and Amazon managed to get to the psychologically important $100 level.

Treasury yields rebounded after yesterday’s pullback, but this rebound was not strong. In addition, the U.S. dollar found itself under strong pressure against a broad basket of currencies, which was bullish for S&P 500.

From a big picture point of view, the continuation of yesterday’s rally is somewhat surprising. Yesterday’s gains were big, and some traders may have preferred to take some profits off the table ahead of the weekend.

However, tech stocks enjoyed strong support in today’s trading sesssion, which indicated that risk appetite continued to grow.

S&P 500 Settled Above The 3960 Level

S&P 500 managed to settle above the resistance at 3960 and is trying to get to the test of the next resistance level at 4000. RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum in the upcoming trading sessions.

In case S&P 500 gets above the 4000 level, it will head towards the resistance at 4015. A successful test of this level will push S&P 500 towards the resistance at 4040.

On the support side, the previous resistance at 3960 will serve as the first support level for S&P 500 In case S&P 500 settles back below this level, it will head towards the support at 3920. A move below 3920 will open the way to the test of the next support level, which is located at 3885.

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