(Bloomberg) -- The Standard & Poor’s 500 Index is approaching a so-called golden cross that’s considered a buy signal by analysts who make predictions based on patterns in price charts. A golden cross occurs when the 50-day moving average, which is currently at 878.04 for the S&P 500, rises above the 200-day moving average, which is at 918.33, Bloomberg data show. The formation implies further gains for the stock market, according to this type of technical analysis.“If the S&P can hold above its 200-day moving average, the potential for a golden cross increases,” Mary Ann Bartels and Stephen Suttmeier, technical analysts at Bank of America Corp., wrote in a report to clients yesterday.
The U.S. benchmark index’s 50-day moving average has been below the 200-day moving average since December 2007. The 40-day moving average already went above the 150-day moving average in May this year, forming a so-called silver cross, according to Bank of America.The S&P 500 has surged 39 percent from a 12-year low on March 9 amid speculation government measures and interest-rate cuts will help end the global recession. The gauge, which has posted three straight weekly gains, closed at the highest level for the year at 944.74 on June 2. The next resistance levels are at 915 to 965 and at 1,000 to 1,065, Bartels and Suttmeier said.
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