The S&P 500 is trading at 7,848.50 after failing to break 7,897.50, a level that now forms a possible double top. Momentum is cooling, and the index sits between key support and resistance on the 5-hour chart.
The S&P 500 is hovering at 7,848.50 on its 5-hour chart, wedged between support and resistance. Traders face a potential double top near 7,897.50, and cooling momentum raises the odds of a sharp mean-reversion move, according to Investing.com.
A failed breakout meets short-term weakness
The index sits above its long-term 200-period SMA at 7,735.56, but the failed breakout at 7,897.50 is forming a classic double top, with the pattern about 50% complete. The current price is just under the 20-period SMA at 7,851.07, which signals short-term weakness despite uptrend support.
However, the source flags more warning signs. The MACD trend is lower despite price highs, which it says signals risks of a reversal. Recent consolidation is also occurring on lighter volume, hinting at indecision or a brewing larger move.
Bears and bulls watch the 50 SMA
Bears are targeting a breakdown below the 50 SMA at 7,803.81. If that level is lost, it exposes 7,785, then 7,735 at the 200 SMA, and 7,678 as major swing support.
Bulls, by contrast, want a bounce off the 50 SMA and SuperTrend support at 7,805 and 7,808. They need confirmation above 7,825 to retest the highs.
The source labels the 7,820–7,860 range one to avoid, because the price is stuck between short-term and intermediate averages and false signals abound. It advises waiting for a close below or above key levels before acting.
Source: Investing.com
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