S&P 500 Tests Resistance At 3885 As Apple Rallies

Key Insights

• Apple’s strong performance pushed S&P 500 to multi-week highs. 
• Amazon moved towards the $100 level after presenting weak guidance. 
• A successful test of the resistance at 3885 will push S&P 500 towards the next resistance level at 3915.

Tech Stocks Rally As Reports From Apple And Intel Boost Sentiment

S&P 500 gained strong upside momentum and moved towards the 3885 level as Apple shares enjoyed strong support after the release of the company’s quarterly report.

Apple reported revenue of $90.1 billion and earnings of $1.29 per share, beating analyst estimates on both earnings and revenue. It looks that traders waited for an excuse to buy Apple stock as the company’s results were not too strong but the stock gained 8%.

Apple’s results offset the negative impact of the sell-off in Amazon shares, which were down by 8%. It should be noted that Amazon stock was down by as much as 19% during yesterday’s post-market session, so Apple’s results provided material support to general sentiment in the tech segment.

Intel  stock also rallied after the release of the quarterly report. In Intel’s case, traders cheered job-cut plans.

While tech stocks enjoyed broad support, energy stocks like Schlumberger, Pioneer Natural Resources and Hess pulled back as oil markets declined amid worries about coronavirus lockdowns in China. Meanwhile, the leading copper producer Freeport-McMoran was down by 2% as copper settled below the $3.45 level.

Interestingly, stronger dollar and higher Treasury yields did not put any pressure on S&P 500 today. Apple’s solid report boosted traders’ risk appetite, and market participants rushed to buy stocks from various industries.

S&P 500 Tests Multi-Week Highs

Currently, S&P 500 is trying to settle above the resistance level at 3885. RSI remains in the moderate territory, and there is enough room to gain additional upside momentum in the upcoming trading sessions.

In case S&P 500 settles above the 3885 level, it will head towards the next resistance at 3915. A move above 3915 will open the way to the test of the resistance at 3960. In case S&P 500 climbs above 3960, it will move towards the next resistance at 4000.

On the support side, the previous resistance level at 3835 will serve as the first support level for S&P 500. If S&P 500 manages to settle below this level, it will move towards the next support at 3805. A move below the support at 3805 will push S&P 500 towards the support at the 20 EMA at 3760.

For a look at all of today’s economic events, check out our economic calendar.