The breakout from the neckline of this pattern in November 2023 at 4,525 has triggered a strong surge in the index to record high at the 7,844 level. The index then formed a triangle pattern with a base at the 5,000 level. The resistance of this triangle reaches up to the 9,000 area. Each time the index corrects lower, it produces a low and then rallies higher again.
It is observed that the index has been consolidating between 7,800 and 7,450 during the past three months. However, the selloff on Thursday has broken the support level of 7,450. This breakdown is now pushing the index toward the key support level which is defined by the 50-week SMA near 7,240.
The index needs to break above 7,800 to open the way for a rally toward 8,500 in the long term.
SPX Daily Chart: 7,450 Resistance and 7,325 Support
The daily chart below shows that the selloff on Thursday has broken the key support of 7,450. After the breakout, the index is now looking toward the 200-day SMA at 7,325. A break below 7,325 will likely trigger deeper correction. But a recovery above 7,450 may open the way for further upside toward 7,800.