The US 500 stock index (cash) experienced a significant pullback after its latest advance came to a halt at the 4,195 region. However, the index managed to bounce back and recoup some losses in the last couple of daily sessions, jumping decisively above its 50-day simple moving average (SMA).
The momentum indicators currently suggest that the buying interest is intensifying. Specifically, the RSI crossed above its 50-neutral mark, while the stochastic oscillator is ascending steeply near the 80-overbought zone.
If bullish pressures persist, the December resistance of 4,102 might act as the first upside barrier. Piercing through that zone, the price could challenge the September peak of 4,155. Even higher, the bulls could aim for the 4,195 region, which is the 23.6% retracement of the 2,183-4,818 uptrend that extended from the pandemic low till the all-time high in November 2021.
Alternatively, bearish actions could send the price towards its 200-day SMA, currently at 3,942. Should that floor collapse, the price could descend towards the January support of 3,885 before the 38.2% Fibo of 3,812 comes under examination. Failing to halt there, the December low of 3,763 could then provide downside protection.
To conclude, the US 500 index bounced off the congested region that includes the 200-day SMA and the lower Bollinger band, indicating that its pullback could be overstretched. Nevertheless, a strong move above the recent rejection region of 4,195 is needed to alter its short-term picture back to bullish.
