- According to Bank of America, the S&P 500 just issued a bullish signal suggesting it will rise 19% by August 2025.
- The bank highlighted that the stock market has recorded positive year-on-year growth for 12 consecutive months.
- This signal suggests that despite the stock market weakness in April, there is still a bullish backdrop for the stock.
Bank of America says bullish signals are flashing in the stock market, suggesting the S&P 500 index could rise another 19% to 6,000 by August 2025. .
In a note Tuesday, Bank of America technical analyst Steven Satmeyer highlighted the S&P 500 index’s 12th consecutive month of positive year-over-year gains.
In other words, from March 2023 to March 2024, the S&P 500 Index had a positive year-over-year return every month. This bullish signal is the opposite of what happened last year, when the S&P 500 index posted 12 consecutive months of negative year-over-year growth from April 2022 to March 2023.
“April 2023 broke this bearish streak with positive year-over-year returns. We view this as a bullish background signal for U.S. stocks, and SPX has risen more than 20% since then,” Suttmeyer said.
The positive signal that just flashed reminded investors that despite the stock market’s weakness in April, which saw the S&P 500 index fall by about 4%, the long-term trend in stock prices is still up. And that suggests there may be further gains to come.
“Don’t lose sight of the long-term bull market,” Suttmayer said.
Based on historical averages, the monthly positive return streak could extend to 20 months from the current 12 months, which would correspond to a 17% increase in the stock price, Suttmayer said. On the other hand, based on historical data, the median consecutive positive return could span 17 months with an increase of 14%.
This suggests that the S&P 500 index could trade up to 6,000 by August 2025 and up to 6,150 by November 2025.
However, in the short term, as stocks continue to fall, he said investors should focus on the S&P 500’s potential support levels at 5,000 and the 4,600 to 4,800 range.
These support levels indicate a downside potential of up to 9%, indicating that the stock’s current risk/reward profile remains attractive.
