Key Takeaways

The S&P 500 ( SPX ) surpassed the 6,000-point mark last week for the first time since February , extending a rally for stocks that's been fueled by optimism about strong corporate earnings and economic data , as investors await further developments on the trade front.

The benchmark index has rallied sharply from its early-April low to trade just 2.4% below the record high it established in mid-February. Last month, the S&P 500 posted its biggest monthly gain since November 2023, as concerns about the Trump administration’s " Liberation Day " tariffs have subsided.

Below, we take a closer look at the S&P 500’s chart and apply technical analysis to identify key levels that investors will likely be watching.

Pennant Pattern Breakout

After climbing above a descending broadening formation , the S&P 500 trended sharply higher before consolidating within a pennant .

More recently, the index broke out from the pattern last week, indicating a continuation of its recent move higher. Meanwhile, the relative strength index confirms bullish momentum, but remains below its overbought threshold, providing ample room for further upside.

Let’s identify two key overhead areas on the S&P 500’s chart and also locate major support levels to watch during potential retracements.

Key Overhead Areas Worth Tracking

The first key overhead area to track sits around 6,100. This area may provide resistance near a trendline that connects a series on peaks that formed on the chart between December and February just below the index’s record high.

Investors can project an upside target above the record high by using the bars pattern tool. When applying the analysis to the S&P 500’s chart, we extract the steep move higher following the breakout from the descending broadening formation and reposition it from the pennant's breakout point. This projects a target of around 6,575, about 10% above Friday’s close.

Major Support Levels to Watch

During retracements, investors should initially watch the 5,770 level. The index could find support in this area near the low of the pennant pattern, which closely aligns with the 200-day moving average (MA) and a range of corresponding trading activity on the chart extending back to September last year.