May 28 (Bloomberg)
The two-month rally in U.S. stocks is in its final stages and a correction will take place in the coming weeks, according to a technical analyst at Aurel BGC. “The speed of the market’s gains is slower and slower,” Paris-based Alexandre Le Drogoff said in a phone interview yesterday. “Mathematical indicators are showing the market losing steam.” The Standard & Poor’s 500 Index has surged 32 percent from a 12-year low on March 9 as investors speculated the global recession is easing and earnings at companies from Ford Motor Co. to Wells Fargo & Co. beat analysts’ estimates. Le Drogoff said his next resistance level for the S&P 500 is 924 and his next support is 875/878, though he hasn’t set a time frame for either prediction.
“Excessive overselling has driven a powerful rebound,” Le Drogoff said. “We’re near the end of the rally. The message is one of caution.”