Tags: stocks | S&P 500 | rie | shares

US Stocks Will Rise After Short-Term Drop, ING Technical Analysis Predicts

Wednesday, 08 May 2013 07:27 AM

 

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The Standard & Poor’s 500 Index will continue its advance and may trigger a longer-term buy signal for global equity markets, even as the benchmark gauge for U.S. stocks nears a resistance level, according to a technical analyst at ING Groep NV.

The measure is nearing its short-term resistance of 1,635, signalling a possible 1.6 percent decline from Tuesday’s finish to 1,600 within the next two weeks.

Still, a monthly close above the longer-term resistance level of 1,600 would send a buy signal for the next year, triggering a greater increase in the S&P 500 that will lead global stock markets higher, Roelof- Jan van den Akker said.

The S&P 500 climbed Tuesday to its fourth straight record close. The measure topped 1,600 for the first time on May 3.

U.S. stocks are in the fifth year of a bull market amid better- than estimated corporate earnings and three rounds of bond purchases by the Federal Reserve.

“Prices are slowly breaking the upward rising resistance line around 1,600,” van den Akker said in a telephone interview from Amsterdam.

“Even though we may see a short-term pullback that we will consider normal, the S&P 500’s uptrend is intact and likely to continue. Prices are still in a steep upward move in the next few weeks.”

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

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