Bank of America sees a summer rally for the S&P 500 as charts signal 'upside breakout'

A trader looks at price monitors as he works on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters

A strategist at Bank of America thinks the S&P 500 will continue its relentless rally off the mid-March lows as a series of technical signals point to further gains.

The S&P 500 has surged more than 47% since hitting an intraday low on March 23. Those gains were driven in part by massive stimulus from U.S. lawmakers and the Federal Reserve. Hopes for potential coronavirus vaccine and treatments also gave stocks a boost.

However, the S&P 500 has been stuck in a range of about 150 points this month, struggling to make a meaningful move above 3,230. Crossing that level would put the S&P 500 in positive territory for the year.

But Stephen Suttmeier, Bank of America's technical research strategist, thinks more gains lie ahead. "We favor a summer rally and believe that the S&P 500 (SPX) is positioned for an upside breakout."