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

S&P 500'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 use Fibonacci projections as a tool. In the case of an uptrend such as the one the S&P 500 has been trading within since October 2022, an upward move is identified, and a multiple of that advance, usually 1.618 and 2.618, is projected from a corrective low that followed the advance. This creates a Fibonacci extension which can serve as a probable upside target.

For example, taking the October 2022 to July 2023 advance and projecting it from the October 2023 correction low would have created a 161.8% Fibonacci extension target of 5901.55 (not shown on the weekly chart). Since this has been surpassed, it is discounted, and the search for further Fibonacci extension targets begins.

One target is derived from the October 2023 low to the March 2024 high, projected higher from the April 2024 low (shown by a black horizontal line on the weekly chart). Another comes from the subsequent upward move and correction low.

​S&P 500 weekly candlestick chart

Key technical levels to watch

The latest upward projection from the April low provides a 161.8% Fibonacci extension target at 6272.68 for the S&P 500, representing a potential upside target. On the way there, the upper 2023–2024 uptrend channel line may act as resistance, meaning this target may not be reached immediately.

The visibility of a target does not specify when it will be achieved, only that it is likely to occur at some point in the future.

Negative divergence, present since April on the weekly chart, can complicate forecasts. It occurs when an underlying asset like the S&P 500 reaches new (record) highs, but the oscillator, such as the relative strength iindex (RSI), registers a series of lower highs. This lack of confirmation suggests potential future weakness or a possible trend reversal.

If the next S&P 500 161.8% Fibonacci extension target at 6272.68 is surpassed next year, a cluster of 161.8% and 261.8% Fibonacci extension targets between 6807.77 - 7020.15 would represent the next higher long-term upside target. Such clustering often indicates probable major extremes like tops and bottoms.

Trend analysis is crucial when analysing financial markets from a technical perspective. Observing the daily chart reveals a series of higher highs and higher lows, which define an uptrend.

​S&P 500 daily candlestick chart

The medium-term uptrend would be challenged only by a decline below the November low at 5696.51. Even then, the critical support zone between 5667 and 5651, including key past high and low points, requires monitoring.

Only a daily chart close below this area would indicate potential bearish momentum building. Unless that unfolds, the uptrend remains intact, with more record highs likely into early 2025.

The August low at 5119.26 represents crucial support for the long-term trend. Further support exists at the January 2022 peak and April 2024 low between 4954 and 4818.

How to trade the S&P 500

1. Research technical analysis principles
2. Choose whether to spread bet or trade contracts for difference (CFDs)
3. Open an account with IG
4. Monitor key technical levels
5. Implement appropriate risk management strategies

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.