​​​S&P 500 at 7000: where are the next upside targets?​​​

S&P's record highs persist despite long-term bearish divergence

This article focuses on potential technical upside targets for the S&P 500 for 2025 and beyond. For a fundamental and technical outlook, readers are encouraged to consult the S&P 500 fundamental and technical 2025 forecast.

With the S&P 500 having reached its 56th record high this year and being on track for its third consecutive week of gains while trading well above the psychological 6000 mark, investors are considering potential upside targets.

Using Fibonacci projections for targets

Technical analysts frequently use Fibonacci projections to identify potential future price levels. In the context of an uptrend, such as the one the S&P 500 has exhibited since October 2022, analysts measure an upward move and project multiples of that move—commonly 1.618 and 2.618—from a subsequent corrective low. This process generates Fibonacci extensions, which can serve as probable upside targets.

For example, the advance from October 2022 to July 2023, when projected from the corrective low in October 2023, yielded a 161.8% Fibonacci extension target of 5,901.55 (not shown on the weekly chart). Since this target has already been surpassed, it is considered less relevant, and analysts now focus on identifying additional Fibonacci extension targets.

Identifying new Fibonacci targets

One potential target is calculated from the October 2023 low to the March 2024 high, then projected from the April 2024 low. This level is represented by a black horizontal line on the weekly chart. Another target arises from analysing subsequent upward moves and corrective lows.

​S&P 500 weekly chart

Key technical levels to watch

The latest upward projection from the April low establishes a 161.8% Fibonacci extension target at 6272.68 for the S&P 500, representing a potential upside level. However, the upper 2023–2024 uptrend channel line may act as resistance, potentially delaying the achievement of this target.

It is important to note that the identification of a target does not imply a specific timeframe for its achievement, only that it is likely to occur at some point in the future.

Divergence and its implications

Negative divergence, present since April on the weekly chart, complicates the outlook. This divergence occurs when the S&P 500 achieves new record highs, but an oscillator, such as the relative strength index (RSI), registers a series of lower highs. This lack of confirmation indicates potential future weakness or the possibility of a trend reversal.

Higher Fibonacci targets

If the S&P 500 surpasses the 161.8% Fibonacci extension target at 6272.68 in 2025, a cluster of 161.8% and 261.8% Fibonacci extension targets between 6807.77 and 7020.15 becomes the next probable long-term upside zone. Clusters of Fibonacci levels often signal major market extremes, such as significant tops or bottoms.

S&P 500 daily chart

Medium- and long-term support levels

The medium-term uptrend for the S&P 500 would face a challenge only if the index declines below the November low at 5696.51. Even then, the critical support zone between 5667 and 5651, which incorporates key past high and low points, remains essential to monitor.

A daily chart close below this zone would signal the possibility of bearish momentum gaining strength. However, unless such a breakdown occurs, the uptrend remains intact, suggesting that new record highs could extend into early 2025.

Long-term support levels

For the long-term trend, the August low at 5119.26 represents a pivotal level of support. Additional key support levels include the January 2022 peak and the April 2024 low, located between 4954 and 4818. These levels serve as critical benchmarks for assessing the sustainability of the broader upward trend.

While all timeframe trends remain bullish, traders should monitor the 5667 to 5651 support zone closely for any signs of weakness in this stock market rally.