Encouraged by aggressive monetary policy from the Fed and the $2 trillion stimulus package from US government, stocks rebounded sharply this past week. For the week, S&P 500 index shot up 10.3% to 2541, Dow Jones Industrial Average gained 12.8% , and the technology laden NASDAQ composite index increased 9.1%.
S&P 500 index rebounded sharply for 3 days after briefly touching the 2200 level twice (forming a W bottom on the hourly chart) on Monday. It went up to 2630 before settling on 2540 to close the week. Immediately above, there are a short term resistance at 2700-2750, and a higher level resistance at around 2820 if the index can get there. It is likely from the chart, that S&P 500 index may attempt to consolidate between 2300 to 2700 channel before the next move. As discussed last week, we are in a bear territory and the recovery will take a long period of time. However it is a good time to evaluate your portfolio composition and make adjustments at the resistance and support levels.
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| Weekly chart of S&P 500 index |
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