The S&P 500 may not have formed a solid base yet and the recent surge could give way to another steep decline, with long-term support providing a backstop at 600 points, Roelof van den Akker, technical analyst at ING Wholesale Banking, told CNBC.
“We should not be surprised if the S&P will make new short-term lows below 670 (points) in the coming weeks in this longer-term bottoming process,” Akker said. “Longer-term support is coming in around 600,” he added.
“It’s still far too early to conclude that we have seen the lows within this bottoming process,” according to Akker.
The S&P needs to break above the upper end of its “falling trend channel,” Akker said, which is a range-bound trend of lower highs and deeper lows.
A move above 850 points on the S&P, a rise of around 3 percent, would signal a break above the all-important range and could mean a bottom is forming in the chart, he said.
If this week’s early surge was to give way to declines, there is a possibility of a solid support level between 766 and 755 points, Akker added.
- Watch the full interview with Roelof van den Akker above.
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