As U.S. stocks have rallied sharply over the last week, chart watchers say the Standard & Poor’s 500 index is poised for a significant test. From a technical point of view, the Standard & Poor’s 500-stock index has traded roughly between 1120 and 1220 since early August. Breaking above 1220 is the next major milestone technicians are watching closely, as it could lead to further gains before year end.
“We’ve basically been going sideways for a few months,” said John Kosar, director of research at Asbury Research. “Sideways indicates indecision. But getting out of the range will indicate a certain amount of conviction among investors.”