Stocks are defying risks and naysayers, will rally more: BofA strategist

US stocks are"climbing a wall of worry" - a reference to bullish market trends that defy economic uncertainty and naysayers - and the rally has room to run further, according to Bank of America's chief equity technical strategist.

The current phase in equities is reminiscent of three instances in the past decade or so when the market pushed high in spite of perceived risks - the threat of a trade war with China in 2019, Brexit and the US presidential election in 2016, and the Eurozone debt crisis in 2012, Stephen Suttmeier toldThe benchmark S&P 500 share index climbed 14% so far in 2023 while the tech-heavy Nasdaq 100 surged 37%, despite many experts warning of an impending recession.

Stocks could benefit from favorable seasonal trends, and chart patterns are signaling more gains, Suttmeier said. "We are in one of the better seasonal parts of the year - June through August - where the market typically see a summer rally. But I think what's even more important is, we've cleared some important resistances on the S&P - first and foremost is the 4,200 level, which I think is the level that triggered FOMO to get the market to go to new 52-week highs," he said.

Technical patterns suggest the S&P 500 could rise above 4,500 this summer, he added. The gauge was at 4,409.59 as of Friday's close.from its low in October, a signal that it is officially in a new bull market - but Suttmeier said"it looks more like a trough in the market. And the bull market actually can date it all the way back to the October low — so it's not shiny and new, we've been in one for about 6 or 7 months already.

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