Stocks are expected to stage a short-term rebound, but technical analysts watching price charts warn the correction is not over yet. Stocks moved higher on Monday as they attempted to recover or at least stabilize after last week’s losses, when the S&P 500 posted its worst week since March 2023. It fell more than 5%. Chart watchers on Wall Street widely expected a tactical rebound in stocks after recent losses, especially in a profitable week for the largest technology companies. But they also remain wary of further developments in integration. JC O’Hara, chief market technician at Roth MKM, wrote on Sunday: “While a near-term rebound is possible, the breakout and deeply oversold conditions have not yet expanded to the point where we are confident that a true low will form.” The technician said he expects the target to Support for S&P 500 stocks – the point at which buyers will re-emerge – is between 4,700 and 4,800. . “History shows that we are approaching a tactical low and a rebound is increasingly likely,” O’Hara continued. “This may not be the optimal ‘low’ to buy, but we would not recommend selling at this time. .” .SPX YTD Mountain S&P 500 To be sure, some observers are expecting a more sustained rally in the stock market than just a rebound. Fundstrat’s Tom Lee expects stocks to be oversold and says all stocks need a positive catalyst higher. “I think as long as inflation moves better than expected, we’re in a good position to rebound,” Lee said on CNBC’s “Squawk Box” on Monday. But other technicians share a similar view to O’Hara. On Saturday, Oppenheimer’s Ari Walder wrote that stocks seemed “tactically attractive,” but added that the market now “needs to build a bottom.” He predicts the S&P 500 may find support below 4,800 and may not find a true bottom for weeks. He added that U.S. Treasury yields must stop rising before stocks can start rising again. However, unlike O’Hara, he expects investors can start buying the dip now. “While we believe the S&P is likely to be within 2-4% of the correction lows, a final inflection point may still be weeks away,” Wald wrote. “Looking ahead, as summer approaches, we Expect to become increasingly optimistic, as we have shown that first-term election years are typically strongest between June and August. “For now, investors should opportunistically take advantage of the decline,” Wald added. days and keep near-term expectations balanced.” Meanwhile, BTIG’s Jonathan Krinsky said he expects a rebound to materialize “early in the week” as tactical indicators point to oversold conditions. But he expects the sell-off to take longer to end, with the S&P 500 pulling back to 4,700. He pointed out that energy is an industry that performs well. “So far, the S&P 500’s intraday correction of -5.9% is exactly the same as the initial decline before the multi-week rally in August ’23,” Klinsky wrote. “While we don’t expect things to start here , but it’s worth noting that a similar eventual retracement would take the SPX down to around 4700.” Krinsky added: “While 4800 is a reasonable support level, a breakout would also mark a 200-point move higher. Average) (4674). “The July-October correction lasted three months (in 2023), and we’re less than a month away from this one.” Elsewhere, Wolfe’s Robkins Berg expects the market to continue to rotate, most notably the value that growth brings.
