The Standard & Poor’s 500 Index could fall as much as 3 percent in coming weeks, representing a buying opportunity for investors, as the U.S. benchmark gauge will rally into 2011, according to technical analysts at UBS AG.
Zurich-based Michael Riesner and Marc Mueller wrote in a report dated yesterday that a new support level, or floor limiting declines, for the index is between 1,155 and 1,145, a 2.2 percent to 3 percent decline from yesterday’s 1,180.73 close. The S&P 500 has slipped 0.2 percent so far this month and is headed for the first monthly decline since August as concern escalated that Europe’s debt crisis will spread.
“Another one or two weeks of consolidation should bring us into position for another bull run,” Riesner and Mueller wrote. The analysts see the first resistance level, or ceiling limiting gains, for the S&P 500 at 1,227, a 3.9 percent increase compared with yesterday’s close. “We are gaining conviction for a mid- December low projection, which finally opens the way for a classic Christmas/yearend rally.”
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. UBS is ranked as the top bank for equity technical analysis and charting according to a 2010 Thomson Extel survey.
No comments:
Post a Comment