Watch These S&P 500 Chart Levels as More Tariffs Loom

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Key Takeaways

• The S&P 500 plunged on Friday and has lost ground in five of the past six weeks amid concerns encircling the impact of tariffs and the outlook for the economy.
• The index broke down below a flag pattern in Friday’s trading assembly, potentially paving the way for a continuation move lower.
• Investors should monitor crucial support levels on the S&P 500’s blueprint around 5,445 and 5,260, while also watching key resistance levels near 5,875 and 6,090.

The S&P 500 (SPX) lost coach last week amid uncertainty about the impact of tariffs and growing concerns the economy could be headed toward a depression.

The index, which has lost ground in five of the last six weeks, could see heightened volatility this week with new schedule of charges expected on Wednesday, a day President Trump has referred to as “Liberation Day.”

The S&P 500 trades 9% below its record high set survive month as the Trump administration’s on again, off again tariff policy has sparked concerns that inflation could reignite and trade growth could stall. The benchmark index fell 2% on Friday to close at 5,581.

Below, we take a closer look at the S&P 500’s map and apply technical analysis to identify crucial levels worth watching out.

Flag Pattern Breakdown

After go to ruin below the closely watched 200-day moving average, the S&P 500 formed a flag in the second half of Cortege before breaking down below the pattern in Friday’s trading session, potentially paving the way for a continuation move modulate.

It’s also worth pointing out that the relative strength index failed to climb back above the 50 outset during the index’s recent upswing, signaling underlying weak buying momentum.

Let’s identify several crucial keep and resistance levels on the S&P 500’s chart that that investors may be monitoring.

Crucial Support Levels to Monitor

Over downside this week could see the index initially decline to around 5,445. This location may provide undergo near the lower range of a consolidation period that formed on the chart in June last year, which closely aligns with troughs in July and September.

The bulls’ incapacity to defend this important technical level sets the stage for a possible drop to the 5,260 area. Those who inaugurate in the index may seek buying opportunities in this region near last year’s prominent March peak, the May pullback trough, and the early-August switch low. 

Interestingly, this area also sits in the same vicinity as a projected bars pattern target that fight c assumes the index’s move lower in October 2023 following a flag pattern on the chart and overlays it from the current ease up pattern.

Key Resistance Levels Worth Watching

A recovery effort could see an initial upswing to around 5,875. The sign finds a confluence of resistance at this level near the downward sloping 50-day MA and a trendline that connects a area of similar price points on the chart stretching back to the October peak.

Finally, a breakout above this space may see the S&P 500 climb to the 6,090 level. Market watchers would likely scrutinize this region as it could stipulate resistance near multiple peaks on the chart positioned just below the index’s record high set last month.

The opines, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the boyfriend this article was written, the author does not own any of the above securities.