(Bloomberg) -- The Standard & Poor’s 500 Index is approaching a 1,020 “massive resistance level” that could lead to the “final point of this rally” mid-August, according to analysts at UBS AG, who look at seasonal trends in the market.
The strategists Michael Riesner and Marc Mueller cited previous bear market corrections, such as Black Monday on Oct. 19, 1987, or the October low of 2002, which generally started in August and carried on until October. The S&P 500 Index rose to 1,005.65 on Aug. 4, the highest since Nov. 4.
“The whole March recovery rally is moving into its ultimate top,” wrote Riesner and Mueller. “From this top we will see a larger and longer-lasting correction into November.” The analysts said investors will start selling technology companies.
A break above 1,020 would imply a move toward 1,100 as a next bigger projection,” Riesner and Mueller added in the report. The S&P 500 has posted three weekly gains since July 17. It dropped for the first time in five days yesterday as service industries unexpectedly contracted at a faster pace in July.
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