Stocks Analysis by Fawad Razaqzada covering: S&P 500. Read Fawad Razaqzada's latest article on Investing.com
S&P 500's post-election rally faces resistance as overbought conditions mount.Watch key support zones around 5990 and 595.00 for potential pullbacks in SPY.
So far, US stock investors have ignored the weakness in global markets outside of the US as well as the drop in major commodity and bond prices. With the USyield approaching 4.5% amid the hawkish repricing of US rates in 2025, this is something that may ultimately hold the markets back, especially as the major US indices are now at technically overbought levels.Adding to the day’s significance, Fed Chair Jerome Powell is set to speak in Dallas, with a focus on the economic outlook.
The RSI is at or near 70.00 on all major long-term charts, such as the daily, weekly and monthly. These overbought conditions will need to be worked off at some point, either through a sell-off or consolidation, before the bulls look for fresh buy-the-dip trades. Therefore, we could see a pullback in the days ahead, although we are still awaiting a clear reversal sign on the S&P for the trigger.
So, there are lots of support levels that would need to break down before the bears regain any sort of control. I am merely expecting to see some short-term weakness from these overbought levels, but for a full-on sell-off to take place, the bears will need to break several support levels. Until that happens, I am only expecting a modest pullback as things.One of the ways to gain access to the S&P 500 is through the SPDR S&P 500 ETF Trust or more commonly known as SPY.
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