Stocks are sharply higher, but what did the gains so for the technicals for S&P/Nasdaq?

The broader U.S. stock indices ended last week on a stronger note, with both the S&P 500 and Nasdaq moving higher on Friday. However, despite the gains, each index remained trapped below its 100-hour and 200-hour moving averages — a sign that sellers still held the short-term technical advantage. That picture changed today.

Both indices opened with bullish upside gaps and, in the process, surged above their respective 100-hour and 200-hour moving averages. It marks the first time either index has traded above both key technical levels since June 4, shifting the near-term bias back in favor of the buyers. As a result, those moving averages now become critical risk-defining levels. As long as the price remains above them, the bulls maintain control.

For the S&P 500, the 100-hour moving average sits at 7,489.11, while the 200-hour moving average comes in at 7,441.86. The index is currently trading near 7,545.29, up 114 points or 1.54% on the day. A move back below both moving averages would weaken the bullish outlook and hand the advantage back to sellers. Until then, traders can focus on the record high at 7,620.90 as the next major upside target.

The Nasdaq tells a similar story. The index gapped above both its 100-hour moving average at 26,382.22 and its 200-hour moving average at 26,228.87. It currently trades near 26,501, up 612 points or 2.37%. As with the S&P, maintaining price action above those key moving averages keeps buyers firmly in charge. On the topside, traders will first look toward 26,826.97 as an interim target, with the all-time high at 27,190.21 looming beyond.

The bottom line: the bulls are back on the offensive. They're charging, snorting, and reclaiming control on Wall Street. The technical roadmap is clear — stay above the 100-hour and 200-hour moving averages, and the path of least resistance remains higher.

This article was written by Greg Michalowski at investinglive.com.

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