The S&P 500: Strong Recovery With Improving Breadth
The S&P 500 has staged an impressive recovery, trading up nearly 8% from its recent lows after enduring five consecutive weeks of selling. Despite the turbulence driven by geopolitical headlines — particularly ongoing U.S.-Iran negotiations and broader diplomatic activity — the technical trends are telling a louder story than the news cycle.
As of now, the index sits just over 2% from its all-time highs, a remarkable feat given how sharply it sold off. This recovery is not happening in a vacuum; it is being accompanied by improving market breadth. The advance-decline line has been trending upward, and more than 50% of stocks are now trading above their 200-day moving averages. When breadth improves alongside price, it suggests the rally is being driven by broad participation rather than a handful of mega-cap names — a healthier foundation for continued gains.
In the near term, there are two major support levels to watch. The first is the 50-day moving average, sitting around 5,760. A retest of this level would not be surprising, particularly since some of the recent rally has occurred on lighter-than-ideal volume. Below that, the gap created on the 8th of last week presents a substantial support zone between 5,620 and 5,670, with the 200-day moving average falling right in the middle of that range near 5,670. As long as these levels hold, the trend remains firmly bullish.
On the geopolitical front, the fact that the U.S. and Iran remain engaged in active negotiations is itself a positive signal for markets. Reports suggest the U.S. proposed a 20-year enrichment freeze, with Iran countering with a shorter single-digit period. Pakistan has also intensified diplomatic efforts to bring both parties back to the table. The key takeaway is that dialogue is ongoing — the process is not dead in the water, and that continued engagement is helping to underpin market optimism.
Palantir: A Bottom-Fishing Opportunity Emerges
The software sector as a whole has been one of the primary drags on technology stocks over the past several months, declining roughly 25% and weighing heavily on the broader tech landscape. However, the sector is now showing signs of what appears to be a false breakdown — a scenario where price briefly breaks below a key support level only to reverse sharply back above it. Software recently printed a new yearly low, but is now attempting to close above the high of that low day, which would serve as the first technical confirmation of a support bounce.
Palantir is mirroring this exact price action. The stock printed a doji candle — a classic indecision pattern that often precedes reversals — right on and below its long-term support line. The following session brought follow-through buying, with the stock moving to close above the high of the low day. For bullish traders and investors, this is a meaningful confirmation signal.
What makes this setup particularly compelling is the momentum divergence. Even as Palantir made its recent price low, momentum indicators were diverging positively — printing higher lows rather than confirming the price low. This type of bullish momentum divergence is typically the first sign that a reversal is forming before price itself catches up and accelerates higher.
The risk-to-reward setup here is favorable. Traders can define their risk at the long-term support level, while resistance overhead sits at the anchored VWAP from the all-time highs around $160. The combination of a false breakdown, a doji reversal candle, positive momentum divergence, and improving sector dynamics creates a technically attractive entry point.
Nvidia: Bottoming Patterns Point to a Potential Breakout
Semiconductors as a sector have been one of the strongest areas of the market, ripping to new all-time highs while other tech subsectors struggled. Nvidia, long regarded as the leader in this space, has paradoxically been stuck in a trading range between approximately $170 and $195 for the better part of the past six months. For April alone, the stock has gained about 7.8%, trading around $188 — still well off its October high near $212.
Similar to Palantir, Nvidia recently experienced what appears to be a false breakdown below support. Failed breakdowns are among the most powerful technical signals because they tend to produce fast, sharp moves in the opposite direction — and that is precisely what has unfolded. The stock broke below support, quickly reversed, and has been moving higher with conviction.
Momentum tells an equally bullish story. While price made lower lows recently, momentum diverged positively by printing a higher low — the textbook bullish momentum divergence that often precedes significant trend reversals. On shorter time frames, bottoming formations such as a cup-and-handle pattern are visible, and momentum has already shifted into a bullish regime.
Short-term support is well-defined at the 200-day moving average around $180, right in the middle of the broader trading range. Long-term resistance sits at $195, the top of the range. The critical question is whether Nvidia can break out above $195 decisively. If it does, the measured move from the range — roughly $25 — would project a target past the all-time highs, potentially reaching $220 or beyond.
The Bigger Picture
Across all three charts — the S&P 500, Palantir, and Nvidia — a common theme emerges: the trend is reasserting itself to the upside despite noisy headlines. Improving breadth in the broader market, false breakdowns resolving higher in individual names, and bullish momentum divergences across the board all point to a market that is absorbing bad news and moving higher. While lighter volume on the S&P recovery and ongoing geopolitical uncertainty warrant some caution, the technical evidence favors bulls in the near term. The trend, as the old saying goes, remains your friend.