Marked indices including S&P 500 (SPX), S&P 100, NASDAQ 100, and NASDAQ Composite continued to reach new all-time highs last week.
Alongside this rally, market breadth also improved at the index level, with the Russell 2000, NYSE, and Dow Jones Industrial Average also hitting new record highs “to suggest that the summer 2024 rally is getting healthier,” Bank of America strategists noted.
The SPX achieved its target in the 5600s, following a December 2023 breakout from a 2022-2023 bullish cup and handle formation.
"The early-2024 breakout to new all-time highs on the SPX projects further upside potential to 6150,” strategists said. The index is now trading above the tactical supports located at 5562, 5440s, 5340, 5265, and 5191.
Despite the percentage of SPX stocks above 50-day and 200-day moving averages, the percentage of SPX stocks at 52-week lows, and the 10-day moving average of the spread between SPX 52-week highs and lows not fully confirming the 2024 summer rally into the 5600s, these metrics held crucial tipping point supports last week, which analysts view positively.
Meanwhile, the bullish breakout for the Russell 2000 above the 208-212 range confirms a bottom for this small-cap exchange-traded funds (ETFs) from the 2022-2023 lows, signaling upside potential “into the 230s/240s and even toward 260," according to BofA.
"This breakout also confirms a much healthier summer rally with broadening participation,” strategists continued.
Previous resistance at 208-212 has now turned into support. Moreover, the 40-week moving average at 196.40 is poised for a "golden cross" above the 200-week moving average of 196.34 this week. BofA highlighted that key chart support remains at the 191-187 range.