Bank of America (BofA) is unveiling its outlook for the S&P 500 for the rest of the year as the stock market surges to new record highs.
In a new CNBC interview, Paul Ciana – BofA’s head of fixed income, currency, commodity, and equity technical research – says he expects the S&P 500 to rally in the coming weeks after breaking out from a bullish reversal pattern.
-->“Yes, the S&P 500 is getting a little bit overbought, and we’re seeing signs of tactical weakness. But that’s okay. We’re also seeing plenty of signs for a bullish trend.
We think back to May, when we initiated our bullish outlook for this summer. We had that very nice [inverse] head and shoulders bottom in the daily chart of the S&P 500. That, like the technical textbooks would say, measures up to about 6,625.
So we’ve been looking for a rally into the 6,500 this summer, maybe with a little upside risk to that.”
Source: CNBC/YouTubeWhile Ciana is bullish on the S&P 500, he warns that its ascent will not happen in a straight line. The BofA executive predicts that the stock market index will witness a correction once it hits his target level based on a technical analysis rule.
“In technicals, we like to say that the rule of alternation occurs with corrections, and there are a lot of parallels between 2025 markets and macro with 2018. In 2018, we had that shallow correction in the first half, big rally to all-time highs and a deep correction at year-end.
So I think the rule of alternation suggests we get this rally to new all-time highs, we have a mean reversion toward year-end. So maybe if we get up to 6,500, 6,600 toward year-end, maybe we come back down toward 6,200.”
Ciana clarifies that the S&P 500 succumbed to a deep pullback earlier this year, and that a modest correction could occur in the coming months – an inverse scenario of what happened in 2018.
As of Monday’s close, the S&P 500 is trading at 6,268.
