Stock Bulls in Charge as Dow, S&P 500 Test Key Technical Levels
(Bloomberg) -- The sixth gain in the past seven sessions for U.S. stocks has taken major equity benchmarks above key technical levels.
The Dow Jones Industrial Average surged more than 1 percent Monday to pierce its average price for the past 50 days. Two weeks ago, the blue-chip measure tumbled below its 200-day moving average for the first time in two years, as escalating U.S.-China trade tensions rattled investors.
The latest rally comes as focus shifts to the coming quarterly earnings reports that are forecast to show double-digit profit growth. Dow members Caterpillar Inc., Boeing Co. and Intel Corp., which rely heavily on overseas sales, have been among the hardest hit by trade angst in the past month.
The S&P 500 Index also was giving chartists reason for optimism Monday. The equity benchmark made a clean break above all three of its moving averages last week and was trading within 20 points of 2,800. The round-number milestone has served as a ceiling for past attempts at recovery from February’s selloff.
Evercore ISI’s technical analyst Rich Ross said in a research note Monday that the benchmark for U.S. equities is in a “strong position to take out 2,800 and trade 2,900” on the back of a weaker dollar and stronger emerging markets.
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