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The S&P 500 closed at a record high Friday after briefly crossing the 6K level for the first time, as stocks have rallied following the U.S. presidential election.
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The index broke above a rising wedge pattern on above-average volume last week, setting the stage for further potential gains in the week ahead.
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A measured move, which calculates the distance between the rising wedge’s two trendlines near their widest point and adds that amount to the initial breakout area, projects a price target in the S&P 500 of 6,500.
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Investors should watch important support levels on the index’s chart around 5,900 and 5,670.
The S&P 500 (SPX) closed at a record high Friday after briefly crossing the 6K level for the first time, as stocks have rallied following the U.S. presidential election.
Investors have bid up stocks on expectations for an increasingly business-friendly White House and Congress following Donald Trump’s decisive victory in last week’s election.
Sentiment also received a boost after the Federal Reserve on Thursday reduced its benchmark lending rate by a quarter percentage point to a range of 4.5% to 4.75%, its lowest since February 2023. Through Friday’s close, the S&P 500 has gained around 25% this year.
Below, we break down the technicals on the index’s chart and point out price levels that investors may be watching.
Since forming a peak in mid-July, the S&P 500 traded within a rising wedge before breaking out above the pattern on Wednesday following the presidential election outcome, setting the stage for further potential gains in the week ahead.
Importantly, above-average volumes have supported the move higher, indicating buying conviction from larger market participants, such as institutional investors and asset managers.
Moreover, the relative strength index (RSI) confirms bullish price momentum with a reading nearing 70, but also cautions the potential for short-term profit taking as the indicator approaches overbought levels.
Given the index has moved into price discovery mode, let’s look at a chart-based upside price target and also point out key support levels to watch during pullbacks.
Investors can forecast a price target using the measured move technique, also know as the measuring principle. This works be calculating the distance between the rising wedge pattern’s two trendlines near their widest point and adding that amount to the initial breakout area. For instance, we add 600 to 5,900, which projects an upside target of 6,500.
