Sign InSPDR S&P 500 ETF Trust (SPY): Strong Technical Indicators Point to Bullish Outlook
Summary
Based on technical, fundamental analysis, and recent news, the SPDR S&P 500 ETF Trust (SPY) is expected to experience a minor correction in the short term but maintain a long-term upward trend, making it a Buy with caution. (Date of analysis: N/A)
Technical Analysis
The SPDR S&P 500 ETF Trust (SPY) recently closed at $455.2, marking a minor change of 1.01 (0.22%). Its current stock price rests near its year-high of $456.43, indicating a bullish sentiment in the market. Its year-low is $348.11, suggesting the stock has since recovered impressively.
Looking at the stock’s moving averages, SPY boasts a 50-Day Moving Average of $429.41 and a 200-Day Moving Average of $402.94. As the current closing price is above both averages, this suggests a sustained bullish trend. Furthermore, the Moving Average Convergence Divergence (MACD) of 3.96 for the last three months also confirms the ongoing uptrend, indicating strong bullish momentum.
The Relative Strength Index (RSI) currently stands at 82. This value is in the overbought territory, indicating that the stock might experience a temporary pullback due to excessive buying.
Fundamental Analysis
SPY maintains a substantial market capitalization of $417.77 billion. The trading volume has lately been slightly lower than the average volume, possibly due to investors waiting for further price action or news.
The Earnings Per Share (EPS) rests at 19.85, and with a Price-to-earnings (P/E) of 22.93, the valuation seems reasonable when compared to the broader market. The next earnings announcement is due on November 29, 2017.
Consideration of Recent News
Recent news discloses continued interest in equity ETFs, such as SPY. Continuous investment in these ETFs indicates investor’s confidence and a positive sentiment surrounding these investments. The launch of the Equity Defined Protection ETF, which seeks to provide the upside of SPY, also reveals faith in SPY's performance.
Stock Prediction
Considering the combined technical and fundamental analysis, along with the consideration of recent news items, SPY could experience a minor correction in the short term due to its overbought RSI value. In the longer term, due to the positive market sentiment, increased exposure, and reasonable valuation, SPY will likely continue its upward trend, potentially surpassing its current year’s high. For the next trading day, the price may hover around the previous close, before advancing later in the week.
Final Evaluation
In light of the strong technical signals, favorable fundamental indicators, and current news sentiment, an overall bullish outlook on SPY is reasonable. While a short-term correction might occur, the long-term trend is expected to remain bullish. Consequently, SPY can presently be categorized as a 'Buy'. However, investors should keep an eye on the RSI and prepare for possible short-term pullbacks. As always, they should consider their risk tolerance and investment goals before making decisions.
