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Today, StockCharts365.com has taken a closer look at the important American Standard and Poor's 500, or simply the S&P 500.


[22 June 2024]


Today, StockCharts365.com has taken a closer look at the important American S&P500 index, and what the technical picture for the index now indicates about the further development in the short and medium term.


 

First, a little about the Standard and Poor's 500, or simply the S&P 500


The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices and includes approximately 80% of the total market capitalization of U.S. public companies, with an aggregate market cap of more than $43 trillion as of January 2024.


The S&P 500 index is a free-float weighted/capitalization-weighted index. As of May 31, 2024, the nine largest companies on the list of S&P 500 companies accounted for 34.1% of the market capitalization of the index and were, in order of highest to lowest weighting: Microsoft, Apple, Nvidia, Amazon.com, Meta Platforms, Alphabet (including both class A & C shares), Berkshire Hathaway, Eli Lilly and Company, and JPMorgan Chase.


 

Technical Analysis of the Standard and Poor's 500 (S&P 500)

Charts are from the technical analysis program Vikingen. The S&P500 shows a positive development in both the short and long term within an upward trend.


Some time ago, the S&P500 broke through the resistance level at the upper trend line in the long-term rising trend (cf. weekly chart). This signaled a possible steeper rising trend going forward.

The S&P500 is now in a new and steeper rising trend (cf. daily chart and weekly chart), and where further growth is indicated within this rising trend.


StockCharts365.com's own analysis models 'The SignalList' and 'The TradingList' are both in a buy signal for the S&P500. Furthermore, the S&P500 is above both the 50-day and 200-day moving averages, and the 50-day moving average is above the 200-day moving average. This helps confirm that both the short-term and long-term trend for the S&P500 index is positive. If we look at various momentum indicators such as RSI, Stochastics and MACD, we see that the S&P500 is now overbought in the very short term. This indicates that there may be a short-term consolidation/correction in the very short picture. On the downside, the first technical support levels are at the lower trend line in the rising trend (cf. daily chart) and which largely coincide with the support level around the 50-day moving average. The first important technical support level for the S&P500 is therefore around 5,300 points. According to the rising trend in which the S&P500 is now moving, a potential of around 5,800 - 6,000 points is indicated within a 3-6 month period. The overall technical picture for the S&P500 index is thus positive, but the index is overbought in the very short term now, so a consolidation or correction may well come before further upswing within the rising trend. What could possibly trigger more negative technical signals, and indicate a possible test of the support level down towards the 200-day moving average, would be if there was a break below the important technical support level around 5250 points and the 50-day moving average.


This could lead to a correction down towards 4800 - 5000 points, but this if the S&P500 were to break below the 5250 level, which is now an important technical support level for the S&P500.


 

NB! Remember to have read and understood the disclaimer.

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