The S&P 500 is starting to form a ‘cup and handle’ pattern. How to watch for the potential breakout ahead

A “cup and handle” pattern is forming in the S & P 500, and could signal a potential breakout ahead, according to Bank of America. Stocks are rallying this month, buoyed by hopes the Federal Reserve is done hiking and could start to cut rates in 2024. The S & P 500 is higher by more than 8% in November, while the Nasdaq Composite has gained 11%. But technical strategist Stephen Suttmeier pointed to a growing “cup and handle” pattern in the S & P 500 that could mean the broader index could swing to new all-time highs. The bullish stock trading pattern is formed when the price of an asset rises, falls to form a base, and then gains once more, signaling a potential buying opportunity. “If the SPX can decisively surpass the low 4600s, it would confirm a bullish cup and handle from early 2022 with upside potential beyond the all-time high at 4819 toward a measured move in the low 5200s and the big base pattern count in the 5600s,” Suttmeier wrote on Monday. “Rising 40-week and 200-week MAs underpin this bullish longer-term technical setup.” The S & P 500 closed Monday at 4,547.38.