S&P500 (SPX) Price Analysis – July 04, 2023

Daily Price Outlook

On Tuesday, the SPX Index is +0.12% up from its previous 24 hours level at $4455.59. The Index continued its bullish streak for 5th consecutive session and rose to its highest level since mid-April 2022.

Bank of America predicts S&P 500 to hit 4800 by year-end after strong H1 rally

The S&P 500 Index closed the first half of the year with gains of almost 16%, marking the best H1 performance since 2019. On Monday, Bank of America analysts stated that it could be potentially bad news for bearish investors. They pointed out that historically, when the S&P 500 has a solid 1H, it tends to continue its winning streak in the 2H.

Data analysis dating back to 1928 revealed that following above-average 1H performance, the index tends to be stronger in the 2H, with a 77% success rate and an average return of 6.5% (8.3% median). Bank of America projected that this trend could potentially drive the S&P 500 to reach 4730 (or 4800) by the end of 2023.

This positive prediction from BofA is adding strength to the already rising prices of S&P 500 on Tuesday.

Tesla Outstanding Performance Added Gains in SPX

Tesla shares surged 6.9% on Monday following the release of stronger-than-expected second-quarter delivery and production numbers. Analysts had anticipated 445,925 deliveries, but Tesla exceeded expectations by delivering 466,140 vehicles for the period ending June 30, 2023. The company's report, which provides a key insight into sales, garnered significant attention from analysts and shareholders.

The boost in delivery numbers was driven by incentives, discounts, and a $7,500 federal tax credit offered to buyers in the U.S. Tesla shares have seen a remarkable 127% increase year to date, rebounding from a challenging performance in 2022. Although still below pre-pandemic highs, the stock has recovered significantly from its low point in December 2022. Tesla Stock’s jump on Monday added strength to the SPX and it is a major component of the S&P 500 Index.

SPX Price Chart – Source: Tradingview

S&P500 (SPX) - Technical analysis

Technical analysis indicates that the S&P 500 index has successfully surpassed the double tap resistance level at 4,440, signaling a strong possibility of a continued bullish trend. The presence of a bullish candle closing above this level further supports this outlook.

The next resistance levels to watch for are 4,511 and 4,525. Conversely, if the support at 4,440 is breached, it could lead to a significant downward move, with a strong support level around 4,395.

The exponential moving average and indicators such as the relative strength index and moving average convergence divergence also lend support to the positive sentiment surrounding the SPX.

These indicators suggest that the bullish trend is likely to persist. Therefore, it is important to monitor the 4,440 level as it may act as a key pivot point for today's trading activity.