S&P 500 Could Rise Above 6,100 After This Pattern Breakout, Says BofA By Investing.com

Investing.com — It broke out of the July-September cup and handle pattern last week, creating a bullish backdrop for the benchmark stock index.

While late September seasonality may be difficult, strategists at Bank of America believe holding the 5670-5650 range through 5615 would “keep this breakout firmly in place with upside potential to 5930 and 6180.”

This bullish outlook is further supported by rising 50- and 100-day moving averages near 5520 and 5441, respectively, with additional chart support around 5400-5390.

BofA also pointed to last week’s strength in market breadth, as new highs in anticipated decline lines signal a bullish indicator for key US equity indices.

This week, strategists point to similar bullish patterns in cumulative net volume growth, noting that this “amplitude” of volume remains positive for the S&P 500, , and .

US stocks ended last week at a record high as the Federal Reserve’s first interest rate cut in years boosted investor appetite for risk assets.

All three major indices ended the week on a positive note. The S&P 500 gained 1.36%, marking its fifth weekly advance in the past six and bringing its 2024 gain to nearly 20%. It rose 1.62 percent, while the Nasdaq climbed 1.49 percent.

The gains came after the Federal Open Market Committee (FOMC) offered a larger-than-expected rate cut of 50 basis points, marking its first cut in 2020.

During the press conference, Fed Chairman Jerome Powell emphasized that the rate cut does not signal major economic problems and expressed optimism about the outlook.

The Fed’s “dot plot” points to another 50 basis points of cuts by the end of the year, with another 100 basis points expected in 2025, in line with forecasts.

Powell also reiterated that future policy decisions will depend on data and be made on a meeting-by-meeting basis.