JP Morgan is bullish: US stocks break free from the black hole predicament, S&P 500's next target range is 6125-6170.

JP Morgan recently released a technical strategy report on US stocks, pointing out that the easing of the US-China trade war has pushed the S&P 500 index to break through the key resistance level of 5750-5785, confirming the start of a low-volatility rebound cycle. It is recommended to set a stop loss position at 5600 and look for a target range of 6125-6170. The previously lagging "Magnificent7Index" has resumed its leadership position, breaking through resistance levels such as the 200-day moving average. Short-term resistance is at 25429-25618, with a long-term target of 27794-28060. The report emphasizes the consistency of technical signals with historical patterns, but warns of potential short-term top formations or geopolitical risks impacting market sentiment. The report bluntly states that the US stock market has broken free from the "black hole dilemma". After the easing of the US-China trade war over the weekend, the S&P 500 index jumped through the key resistance level of 5750-5785, signaling a return to a low-volatility rebound mode. This range not only includes several traditional chart technical levels, but also the threshold of 3% above the 52-week volume-weighted average price (VWAP) of the S&P 500 ETF (SPY). Since the mid-1990s, the index has closed above this threshold after a significant drop below the 52-week VWAP, and has continued its upward trend in the following weeks or months. Given the differentiated trading around this key VWAP, the bank recommends using this 3% threshold as a stop loss position for bearish views. Previously, the bank had expected the index to turn bearish after easing from deep oversold conditions and reaching an initial rebound target of 5500 points (as of early May). In addition, the bank recommends shifting towards a more bullish trend-tracking strategy, using the 5600 point key support area as the initial stop loss for bullish trades. On the upside, the index has effectively broken through the trend line from November 2024 at 5908 points. Until clear signals of trend slowdown, short-term top formations, or potential threats to the new bull market sentiment appear, the bank will list the range of 6125-6170 points as potential upward targets for the summer. The market has temporarily returned to the old leading sectors, with the Magnificent7Index leading the way again. After leading for several months, the Magnificent7Index lagged behind the US market from December 2024 to mid-April 2025. Since mid-April, this index has regained its position as a leading sector. Similar to the overall market, this group has broken through a series of key technical levels, including the 200-day moving average, the high point of the March rebound, and the internal trend line since January 2023, further consolidating its position. The breakthrough of this key resistance level has shattered the mid-term bearish expectations, which originally tended towards further bottoming and retesting key support levels in late spring and summer. Instead, the focus is now on the range of 25429-25618 points (low points of the December 2024-February 2025 top formation), 25833 points (78.6% retracement level from December 2024), and 26800 points (measure target of the bottom formation in April 2025) as the next potential resistance zone. Other long-term resistance levels are 27794 points, the high point of December 2024, and 28060 points, the mid-gap target in May 2025. Similar to the overall market strategy, JP Morgan advises a shift towards trend-tracking strategies, taking the gap at 22824 points on Monday as the stop loss level for new entry risk positions after the breakthrough. Other support levels include the 50-day moving average and the gap at 22013 points from May 1st. The bank expects this uptrend and the reasserted leadership position of the Magnificent7Index to continue into the summer, with initial resistance levels at 25429-26800 points and potential upward targets in the 27794-28060 point resistance zone.