Oct. 14 (Bloomberg) -- The Standard & Poor’s 500 Index has ended its short-term correction and will continue its rally as the benchmark U.S. equities gauge crossed above its 50-day moving average, ING Groep NV said.
The S&P 500 on Oct. 10 climbed above its mean over the previous 50 days at 1,678.48, rebounding from a 4.8 percent slump between Sept. 19 and Oct. 9. The moving average will now provide the support for a short-term increase, Roelof-Jan van den Akker, a senior technical analyst at ING, wrote in a note.
“A weekly close above the upper end of the rising trend channel around 1,740 this week is required to expect an acceleration phase within the uptrend,” Van den Akker wrote.
The gauge has surged 149 percent from a low in March 2009 as Federal Reserve stimulus and a recovery in corporate earnings fueled price gains.
Stocks retreated in late September and early October as lawmakers failed to pass a budget, leading the U.S. government to shut down some of its services and send hundreds of thousands of workers on unpaid leave. The S&P 500 rose 0.8 percent last week amid optimism that Congress will reach a deal and avoid a sovereign default.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
--Editors: Srinivasan Sivabalan, Will Hadfield