BVSPX Analysis: Bears in Control, But a Relief Rally is Imminent

Technical Analysis of BVSPX

BVSPX Daily Chart Insights

• Overall Trend: The long-term trend remains broadly bullish, as the index is trading above the long-term moving average, which continues to slope upwards. The market is currently in a consolidation phase following a significant correction from the May 2025 highs, having found strong support at the long-term moving average in June before bouncing back.
• Key support area: A decisive daily close above the short-term moving average, followed by a sustained break above the 136,340 resistance level, would constitute a strong bullish signal. This would suggest that the correction has ended and the uptrend is resuming, with the next logical target being the major resistance at approximately 139,800. The rising Stochastic oscillator supports the potential for this upward move.

BVSPX 2-hour Chart Analysis

• Bearish short-term trend: The recent aggressive sell-off has caused significant technical damage. However, because the Stochastic is now deeply oversold, a relief rally or consolidation phase is possible in the immediate short term.
• Breakout scenarios: The prevailing trend is down, and a decisive break below the critical support at 130,800 would confirm that the downtrend is continuing. For the bulls to regain control, the index must first bounce and then achieve a convincing close above 134,600, which would put the price back above the key moving averages and negate the immediate bearish structure.

BVSPX Pivot Indicator

• While the overall trend is strongly bearish, the market is very extended to the downside on this timeframe, and a short-term relief rally or pause is expected due to the oversold conditions signaled by the Stochastic.
• Counter-Trend Bounce: Given the oversold Stochastic crossover, the most likely scenario is a bounce from current lows around 130,500 toward the first resistance at approximately 132,700. The move should be viewed as a relief rally within a downtrend, with traders watching for failure at the level or the major resistance zone of 134,100-134,600 to re-initiate short positions.
• Bullish Breakout: For the bearish outlook to be negated, the market would need to not only bounce but also reclaim the major resistance zone at 134,100-134,600. A close above the area would break the bearish market structure and suggest a more significant reversal is underway. Given the recent powerful sell-off, the scenario is least likely in the immediate future.

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