Nvidia's Successes Helps S&P 500 Price Reach Its All-time High
FXOpen
Yesterday, the price of the S&P 500 stock index rose to record closing highs on Thursday. Moreover, such a growth rate (+2.11% per day) has not been observed for 13 months.
Reasons for Extremely Bullish Sentiment:
→ Nvidia's report, which showed impressive earnings and prospects (the company forecasts roughly threefold revenue growth in the first quarter of 2024 amid strong demand for its AI chips). Nvidia's capitalization grew by USD 277 billion in one day — a historical record for the US stock market.
→ Positive news background for yesterday: the US Flash Manufacturing PMI index was actually = 51.5, expected = 50.5, a month ago = 50.7. Signals from the labor market were also positive - the weekly number of applications for unemployment benefits turned out to be = 201k (expected = 217k).
Technical analysis of the S&P 500 chart shows that the price continues to move within the ascending channel, which has been in effect since the beginning of 2024 (shown in blue).
Interestingly, the price of the S&P 500 made a small breakdown of the lower boundary on February 21; a similar pattern was observed on January 17 (both patterns are circled in red). In both cases:
→ after a false breakout of the lower border, a decisive breakout of the resistance level followed: in January this was the level of 4,800, yesterday, the level of 5,040 was broken.
→ The price showed signs of consolidation having reached the median line of the channel.
If the price of the S&P 500 continues to act according to the same scenario, we may see the formation of price consolidation above the broken level of 5,040 and its gradual increase along the median.
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