The S&P 500’s strong start to October was just the beginning of a rally that should last through the end of the year, according to JPMorgan technical analyst Jason Hunter.
Hunter thinks the bounce could ultimately take the S&P 500 back up to test prior resistance at the 200-day moving average, which many chart watchers view as a dividing line between longer-term uptrends and downtrends. The 200-day extends to 4,199 on Wednesday, according to FactSet, which is about 12% above current levels.
Gail Dudack, chief investment strategist at Dudack Research Group, said just prior to the S&P 500’s big bounce, the 25-day up-down volume technical indicator was at a level associated with an “oversold” condition for 10-straight days, and was at a more extreme oversold reading than at the June low, which preceded a two-month uptrend that took the S&P 500 up 17%.