The S&P 500 Index (SPX) consolidated near the 6,844 level during holiday trading in the United States, showing signs of stabilization after a recent correction. Even though quotes still sit below key moving averages, bearish momentum is clearly fading, approaching exhaustion. Thus, a favorable environment for a rebound is set in the market.
A look at the Bollinger Bands reveals that the index is now hovering beneath the middle line at 6,906 and gradually coming closer to the lower limit of the channel at 6,785. In other words, prices are approaching oversold territory—a typical signal for a near-term upward reversal. While these widening bands hint at heightened volatility, the current positioning creates conducive conditions for a bounce back to the middle line.
The Stochastic Oscillator (%K=43, %D=64) is in the neutral zone, reflecting equilibrium between sellers and buyers. A recent bearish crossover confirms a temporary decline, but the indicator has already left overbought territory, leaving room for a trend move in any direction. The Chaikin Oscillator is in the red, pointing to increased capital outflows likely tied to active profit-taking. However, a slower pace of its decline may indicate that selling momentum is waning and bottom levels could be near.
The fundamental picture remains mixed. The latest US inflation report came in softer than expected (2.4% vs. 2.5%) and boosted market confidence in the Federal Reserve’s (Fed) easing cycle. Traders project at least two rate cuts this year—a favorable scenario for risky assets. However, lingering concerns over artificial intelligence (AI) technologies still darken market sentiment, prompting investors to take profits.
From a technical standpoint, the 6,785–6,800 range offers strong support, aligning with the lower Bollinger Band. The middle one serves as the first resistance (6,906) and may become a target for a technical rebound in the coming days. If everything goes according to plan, the S&P 500 Index could even test the 7,000 level.
Check out the trading plan presented below:
Buy SPX at current levels near 6,844. Place Take profit 1 at 6,910 and Take profit 2 at 6,965. Set Stop loss at 6,770.
This forecast remains relevant between February 16 and February 24, 2026.
This content is for informational purposes only and is not intended to be investing advice.
