SP500 Eyes Recovery: Double Bottom Sets Bullish Tone
20 November 2024
In this technical analysis, we take a close look at the SP500, which has shown promising signs of a reversal pattern. The double bottom formation, marked within the red rectangle, appeared at a significant horizontal support level around 5870 points, delineated by an orange line. This level is crucial as it has historically acted as a strong support. A brief dip below this support, followed by a swift reversal, signaled a false breakout—a classic bullish indication of strong demand overpowering selling pressure.
In addition, while the price did not precisely touch the green uptrend line, its proximity adds another layer of bullish sentiment, emphasizing that sellers have been unable to push the price down significantly. This reinforces the perception of a weakening bearish momentum and the resurgence of buying interest.
Given the current technical signals, the outlook points towards a potential move to reclaim the 6000-point level. However, the looming risk of NVIDIA’s upcoming earnings report adds an element of uncertainty. Should the results align with or exceed market expectations, the upward trajectory is likely to continue. On the other hand, a disappointing outcome could disrupt the broader market sentiment and stall or reverse the anticipated upswing.