Dec. 4 (Bloomberg) -- The Standard & Poor’s 500 Index will extend its decline over the past three days if it closes below its 50-day moving average, according to ING Groep NV.
The benchmark measure for U.S. equities declined 0.7 percent to 1,795.15 in the three days through yesterday as investors assessed economic data and reports on car and retail sales to gauge when the Federal Reserve will reduce stimulus. If the index closes below its 50-day moving average of 1,746, a larger correction may occur, according to Roelof-Jan van den Akker, a senior technical analyst at ING. The index will probably find support from 1,777 to 1,755.
“We consider this short-term correction as the next buying opportunity in the uptrend,” Van den Akker said in a note. “Only a close below the 50-day moving average line at 1,746 suggests the start of a larger correction.”
The S&P 500 closed at 1,795.15 yesterday, 2.8 percent above the 1,746 level. The was little changed today at 11:51 a.m. in New York. The measure has added 26 percent this year, which would be its biggest annual gain since 2003, as the Fed has refrained from trimming its monthly bond purchases. The index climbed to an all-time high of 1,807.23 on Nov. 27.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
--Editors: Cecile Vannucci, Will Hadfield