Another stock market dip ahead, BofA tells investors to buy

Source Cryptopolitan

Analysts at BofA noted that stocks have fallen in recent days because of worries over the U.S. budget outlook. They see the S&P 500 as overbought and likely to pull back again soon, but they say any drop is a buying opportunity.

On May 16, the S&P 500 hit a TD Combo sell signal, a technical sign that a short-term fall may follow. The analysts wrote on Wednesday that its relative strength index, a tool that measures how fast prices are moving, also points to a pullback. “The S&P 500 isn’t moody, just a little overbought and wary of rates. Dip due, buy it,” they said.

Business Insider reports that BofA sees solid support for the S&P 500 at about 5,580, roughly 5% below its current level. If stocks slide to that point, buyers would get in at a lower price. On the upside, the analysts expect the index to rise back toward 6,000 to test its record high and even reach 6,266 later this year.

Stocks seem to follow the 2015 – 2018 trajectory

The bank said there are two main reasons that could push stocks higher. First, the market’s path looks a lot like what happened from 2015 to 2018, closely after a presidential election. At that time, stocks gained about 7% before peaking.

Another stock market dip ahead, BofA tells investors to buy
S&P 500 chart. Source: Google Finance

Back then, the S&P 500 later fell around 10% in 2018 from its post-election peak. “If this plays out in 2025, the SPX could hit 6,266 this summer. As Newton’s third law says, for every action there is an equal and opposite reaction,” the analysts wrote.

Second, there is an increasing number of winning stocks as compared to losing stocks. Over 50% of S&P 500 stocks now trade above their 200-day simple moving average, a sign that gains are spreading across the market.

So far this month, the S&P 500 is up, wiping out its losses from the start of the year. However, it has slipped over 1.6% today and has been since last Friday, when Moody’s cut its U.S. debt rating and raised fresh worries about the growing budget gap.

KEY Difference Wire: the secret tool crypto projects use to get guaranteed media coverage

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin ETF Inflows For 2025 Now Outpace 2024, Data ShowsUS Bitcoin spot exchange-traded funds (ETFs) have seen more inflows this year so far compared to the same point in 2024, according to data.
Author  Bitcoinist
Jul 16, Wed
US Bitcoin spot exchange-traded funds (ETFs) have seen more inflows this year so far compared to the same point in 2024, according to data.
placeholder
Gold slips as easing trade tensions offset support from soft dollarGold prices extended losses on Thursday, as easing trade tensions dampened demand for safe-haven assets.
Author  Reuters
19 hours ago
Gold prices extended losses on Thursday, as easing trade tensions dampened demand for safe-haven assets.
placeholder
European Central Bank set to keep interest rates unchanged amid US-EU trade uncertaintyECB is on track to leave its key interest rates unchanged after its July policy meeting, after having reduced rates at each of its last seven meetings.
Author  FXStreet
17 hours ago
ECB is on track to leave its key interest rates unchanged after its July policy meeting, after having reduced rates at each of its last seven meetings.
placeholder
Tesla shares fall amid delays, distractions and fading EV dominanceTesla's TSLA.O shares sank nearly 7% in premarket trading on Thursday.
Author  Reuters
16 hours ago
Tesla's TSLA.O shares sank nearly 7% in premarket trading on Thursday.
placeholder
FTSE 100 hits record high on positive corporate newsLondon's main stock indexes rose on Thursday, with the blue-chip index hitting an all-time intraday peak
Author  Reuters
16 hours ago
London's main stock indexes rose on Thursday, with the blue-chip index hitting an all-time intraday peak
goTop
quote