Look for some consolidation before stocks retest all-time highs, chart analysts say
Fresh all-time highs for the stock market could be in the cards after May’s strong performance. They won’t come immediately, however. The S & P 500 surged 6.2% last month, marking its biggest monthly advance since November 2023. The Nasdaq Composite also roared nearly 10% higher in that time. The advances left the S & P 500 and Nasdaq 3.4% and 6.1% below records set in February and December, respectively. The tough part for investors now will be to remain patient, as chart analysts think the major averages need to absorb the sharp May gains before moving record levels. “While a rally over February peaks should happen this Summer, it’s hard to make a technical call for an immediate breakout,” Fundstrat technical strategist Mark Newton wrote. “Both SPX and QQQ likely will find resistance near February highs that allows for consolidation in mid-June ahead of a push back to new all-time highs.” “Any near-term breakout above May highs should carry SPX up to between 6025-6150 while QQQ might approach 540. Thereafter, it’s important to watch carefully for any possibility of trend reversal, which could start as early as next Monday,” Newton added. The S & P 500 peaked at 5,968.61 in May, while the Invesco QQQ Trust — which tracks the Nasdaq-100 index — reached $526.48. The former ended Monday’s session at 5,935.94, while the latter closed at $523.21. .SPX bar 2025-02-18 SPX since Feb. 18 The broad market benchmark reached an all-time high of 6,147.43 on Feb. 19. At one point in April, it was roughly 20% below that mark before staging a rebound. Craig Johnson, chief market technician at Piper Sandler, noted that the S & P 500 is “setting the stage for the next upward move over the proverbial ‘wall of worry.'” “The SPX and most sectors are just consolidating near their May highs, setting up for potential breakouts,” he added. “While stocks are somewhat stretched in the short term, we remain optimistic and view modest dips and pullbacks, particularly back to well-established support levels, as buying opportunities.”
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