5 Top-Ranked Stocks To Ride On The S&P 500 Rally In 2020

Wall Street bulls are raging since the beginning of this year, breaking one record after another. The S&P 500 Index, generally considered as the barometer of market sentiment within the financial circle, reached a milestone on Jan 16 after closing, above the technical threshold of 3,300 for the first time.

S&P 500 Firing on All Cylinders

The S&P 500 Index rallied 28.9% in 2019, which was a complete reversal of its pathetic performance in 2018 when it had plunged 6.2%. The benchmark index’s gain last year was the second highest (barring 29.6% gain in 2013) since 1997, when the index had jumped 31%. In 2019, the index achieved a major milestone after closing above a key psychological barrier of 3,000 for the first time on Jul 12.

The broad-market index has maintained last year’s momentum since the beginning of 2020. Year to date, it has gained nearly 2.7%. On Jan 17, it ended above 3,300 for the first time. This means the S&P 500 has rallied 10% in the past six months.

On Jan 17, the S&P 500 closed at 3,316.81, well above its 50-day and 200-day moving averages of 3,172.23 and 2,991.99, respectively. In financial literature, the 50-day moving average line is generally recognized as the short-term trend setter, while the 200-day moving average is considered as the long-term trend setter.

It is widely believed in the technical analysis space that whenever the 50-day moving average line surges ahead of the 200-day moving average line, a long-term uptrend for the index becomes a strong possibility.

Will S&P 500’s Bull Run Continue?

Several economists and financial researchers have projected that the S&P 500 index is likely to gain 15-20% in 2020 even though this is the U.S. presidential election year. Historically, the index provided 6.3% annual returns in presidential election years and was up 78% of the time. Meanwhile, trade deals, a stable U.S. economy and a dovish Fed are near-term catalysts for the benchmark index.

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