(Bloomberg) -- The Standard & Poor’s 500 Index may rise further after breaking a “major resistance” level yesterday and crossing its 233-day moving average for the first time since December 2007, according to analysts at Credit Suisse Group AG who use price charts to make forecasts. “A rise above the June highs is expected in the coming 2-3 weeks,” technical analysts at the Swiss bank including Zurich- based Mensur Pocinci wrote in a report today. “With yesterday’s advance most stock markets have triggered upgrade levels on the short- and medium-term horizon.”The benchmark index for U.S. stocks rose to 932.68 at yesterday’s close, bringing this week’s increase to 6.1 percent. While the measure, down 1.4 percent since June 12 when it reached a seven-month high of 946.21, may fall back to 925 in the next day or two, the uptrend is “expected to resume,” Pocinci said in a phone interview. “The upward movement in the last few days was too strong and too fast.”
Technical analysts look at price charts to forecast resistance levels, or ceilings restricting further price increases, and support levels, or floors limiting declines.
“The break of the 233-day moving average, which is a Fibonacci number, is a further bullish sign,” Pocinci said. The S&P 500 closed above its 233-day moving average, currently at 928.61, for the first time since December 2007. Fibonacci analysts use a system pioneered by 13th century mathematician Leonardo Pisano, who discerned ratios from proportions found in nature. The analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. Passage through one level is a sign an index will keep moving to the next.
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