Watch These S&P 500 Levels as Benchmark Index Looks to Snap 4-Day Losing Streak

The S&P 500 (SPX) surged Tuesday morning, putting the benchmark index on track to snap a four-day losing streak.

The large-cap index rose as investors welcomed President Donald Trump’s decision to delay tariffs on imports from Europe that he’d announced just a few days earlier. The S&P 500 was up 1% at 5,860 in the opening minutes of Tuesday’s session.

The S&P 500 lost about a fifth of its value between mid-February and early April as investors assessed the impact of tariffs on economic growth and inflation. However, the index has recovered 20% from last month’s low amid growing optimism about trade deals, the continued strength of the U.S. economy and generally strong corporate earnings.

Below, we take a closer look at the S&P 500’s chart and apply technical analysis to identify price levels worth watching out for.

200-Day Moving Average in Focus

Since hitting a record high in mid-February, the S&P 500 trended sharply lower within a descending broadening formation before breaking out above the pattern late last month.

More recently, the large cap index reclaimed the closely watched 200-day moving average (MA), but retraced back toward the indicator last week, a move that coincided with the relative strength index retreating from its overbought threshold.

Let’s identify crucial support and resistance levels on the S&P 500’s chart.

Crucial Support Levels to Monitor

Further downside from current levels could see the index initially test support around 5,700. This area may attract buying interest near the top range of a brief consolidation period earlier this month that closely aligns with several troughs that formed on the chart in October and November last year.

The bulls’ inability to defend this crucial technical level could trigger a decline to 5,400. Those who invest in the index may look for entry points in this area near a horizontal line that links a series of corresponding price action on the chart stretching back to last July.

Resistance Levels to Watch

A rally from the 200-day MA could propel a move toward the 6,100 level. The index may encounter overhead resistance in this location near several peaks that developed on the chart from December to February just below the stock’s all-time high (ATH).

Investors can project a resistance level to watch above the S&P 500’s ATH by using the measuring principle, a technique that analyzes chart pattern to forecast future price moves.

When applying the analysis to the index, we calculate the distance from the descending broadening formation’s low to high and add that amount to the pattern’s breakout point. For instance, we add 1,200 to 5,450, which projects an upside target of 6,650, around 15% above Friday’s close.

It’s worth noting this level also roughly sits in the same neighborhood as a bars pattern target that takes the index’s uptrend from late April to mid-May and overlays it from the low of last week’s pullback.

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As of the date this article was written, the author does not own any of the above securities.