S&P 500 technical pattern is bullish

The S&P 500 climbed higher by 0.45% on Thursday as crude oil prices rallied to $52 dollars a barrel in intraday trading. Energy shares led the market higher with Ensco Plc. stock ending the day as the sector’s strongest performer.

The oil refiner soared by 5.7% to finish above the $24 mark. There were also steady gains for energy multinationals Halliburton Co. and Transocean Limited as the energy sector climbed by 1.5% as a whole.

Health care stocks also performed well, the sector climbed 0.8% with Express Scripts Holding Co. climbing 4.87%. Rumours of interest from grocery conglomerate Walgreens helped propel the stock to new 52-week highs.

Overall, it was a positive session for stock markets across the world with the Dow Jones Industrial Average and Nasdaq Composite Index posting commensurate gains. Meanwhile, Japan’s Nikkei hit a new high, trading above the 20,000 mark for the first time in seven years.
The CBOE Volatility Index (VIX) hit its lowest level in two weeks, trading just above 13.

Technicals & Outlook

The S&P 500 moved lower in early trading on Thursday before rebounding off the first support. Some resistance was put up as the market hovered around the key pivot but bulls eventually took the index up above the first resistance level to close around 2,090.

Looking ahead, we note that most technical indicators are bullish on the short-term timeframe. We are therefore looking for a bullish move up to 2,110 and looking to buy in the 2057-2080 range.
Further out, we also take a bullish view and see potential for a move up to 2,130. The Elliot wave is wave 5 up and indicators are mostly bullish. We see the risk of a trend reversal as low.

Thierry Laduguie is Trading Strategist at www.bettertrader.co.uk

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