Two Key Technical Levels to Watch in the Stock Market, BofA Says

Bank of America technical strategist Paul Ciana is watching two key levels to determine the stock market's direction. If the S&P 500 drops below 6,200, it could indicate a deeper decline. Conversely, if the Dow rises above 45,000, it could be a sign of a bullish breakout. Ciana has concerns about seasonal weakness and momentum indicators, but his price target for the S&P 500 remains at a record 6,625 later in the year.

Paul Ciana, a technical strategist at Bank of America, has outlined two critical levels to watch in the S&P 500 and Dow Jones Industrial Average (DJIA) that could signal the market's next move. According to Ciana, if the S&P 500 drops below 6,200, it could indicate a more serious decline, while a rise above 45,000 in the Dow could signal a bullish breakout [1].

Ciana's analysis is based on two primary concerns: seasonal weakness and momentum indicators. The last days of summer are historically a weak period for stocks, and the recent steep rally in the market could be a sign of an impending turnaround [1].

The S&P 500 has been trading in a range between 6,200 and 6,500 since early July, with 6,201 serving as a key resistance level. If the index falls below 6,200, it could suggest a deeper decline, representing a 2% drop from Tuesday's closing price [1].

Conversely, the Dow has been trading below the 45,000 level, with brief attempts to breach this resistance level in July. A weekly close above 45,000-45,200 would be crucial for signaling the continuation of the recovery from the April lows, according to Ciana [1].

Despite these concerns, Ciana's price target for the S&P 500 remains at a record 6,625 later in the year. The technical strategist is also keeping an eye on the broader market trends, including fund flows and key technical signals [2].

Investors are eagerly awaiting Fed Chair Jerome Powell's speech at the Jackson Hole Economic Symposium, which is expected to provide insight into the central bank's interest-rate plans and potentially influence market direction [2].

References:
[1] https://www.businessinsider.com/stock-market-outlook-sp500-dow-technical-analysis-sell-off-rally-2025-8
[2] https://www.investopedia.com/5-things-to-know-before-the-stock-market-opens-august-22-2025-11795747