BofA's technical strategist Stephen Suttmeier said in a Wednesday note that the 14% year-to-date rally in the S&P 500 has coincided with"solid technicals" that could push the index into the 4,500 range, or about 5% higher from current levels.This favors new 52-week highs above the August 2022 peak at 4,325, which the S&P 500 achieved last week, and projects further upside into the 4,500s," Suttmeier said.
Suttmeier highlighted a technical price objective of 4,580 for the S&P 500, and added that the recentcombined with FOMO among asset managers, confirms that the ongoing rally in stocks is real. "We view the breakout above 4,200 on the S&P 500 as a FOMO rally. The net long position for asset managers in S&P 500 e-mini futures shows a sharp increase in recent weeks to suggest that FOMO is catching on with institutional asset managers," Suttmeier said.
That FOMO could ultimately push the S&P 500 to"complacency" levels that were last seen in mid-2021, according to Suttmeier, suggesting that there's plenty of upside left if the index breaks above the 4,500 range. But there is a looming tactical risk that could weaken the current rally in stocks, and that's if four major indices fail to confirm the recent rally and get rejected at their resistance levels, according to the note.
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