By Julie Cruz
Aug. 25 (Bloomberg) -- The Standard & Poor’s 500 Index may climb as much as 3.8 percent after breaching a technical level last week, according to Bank of America Corp. analysts who base forecasts on price and volume charts.
The benchmark gauge for U.S. equities may advance to 1,065 after topping a so-called resistance level at 1,014 on Aug. 21, New York-based analysts Mary Ann Bartels and Stephen Suttmeier wrote in a report dated yesterday. The S&P 500 lost 0.1 percent to 1,025.57 yesterday.
“Further new recovery highs are likely over coming days and weeks,” the analysts wrote. “The breakout does point to our targets being tested at 1,055 to 1,065.”
The S&P 500 gained for the fifth time in six weeks last week, reaching the highest level since October, as rising commodity prices and a surge in U.S. home sales added to signs the worst of the recession is over.
“The sentiment is becoming more optimistic,” Bartels said in an interview with Bloomberg Television on Aug. 18. The market will enter “a pause that refreshes and will allow the market to rally back into the end of the year.”
Technical analysts look at price charts to forecast resistance levels, or ceilings restricting further price increases, and support levels, or floors limiting declines. A breakout above the resistance level is considered a sign for further gains.
To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net.
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