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S&P 500 keeps rallying
2020-07-21 • Updated
The risk-on market sentiment pushed the stock index upward. What are the forecasts?
Three main reasons have increased the risk appetite today. Firstly, EU members have agreed on the 750-billion-euros recovery fund in the form of the joint debt. It will allow all the EU countries to recover faster from the downturn caused by the coronavirus. Secondly, the Oxford University in collaboration with AstraZeneca held successful human trials on the Covid-19 vaccine. Tests proved that the injection is safe and efficient. Riskier assets surged after the such promising news. Finally, the S&P 500 rose so much because tech mega-cap stocks surged such as Apple, Microsoft, Netflix and Facebook. For example, Amazon soared by 7.9% after analysts from the Goldman Sachs increased their target price on the stock up to $3 800. Indeed, Amazon has a real potential to further growth as its online retail and cloud-computing segments are in a high demand due to the coronavirus restrictions and the stay-at-home regime. Shares of Microsoft climbed up as well, because strategists raised their target prices for the stock ahead of the earnings report. The shift to the remote work increased the demand for its software and cloud services. Let’s look at the chart now.
The S&P 500 has reached levels unseen since February 24, 2020. It’s moving upward towards the next resistance at the high of January 17, 2020 at 3 325. If it breaks it through, it may surge higher to the all-time high at 3 390. This level remains the medium-term bullish target for most analysts. They believe that while the price is trading above the 3 000 level, bulls may be confident in the further index rally. Anyway, support levels are at the low of July 16 at 3 190 and at the low of July 7 at 3 135.
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