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Investors are focused on the possible extension of the stock market’s bull rally towards 2025.
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Wall Street experts highlighted the top stock market charts to watch next year.
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From interest rates to software stocks, here’s what Wall Street’s top tech experts are watching.
After consecutive strong years for the stock market, investors are fixated on whether the bull rally will continue into 2025.
To get a better idea of what investors should pay attention to next year, Business Insider reached out to Wall Street’s top tech experts and asked them: What’s the most important stock market chart heading into 2025?
From interest rates to software stocks, here’s what they’re looking at.
Will Tamplin, Fairlead Strategies
“In December, the S&P 500 Index (SPX) nearly met a measured move projection of 6118, which was targeted for a breakout in the first quarter of this year. The measured move projects the 2020-2021 uptrend from the 2022 low. This indicates that an extended period of consolidation is likely in the first half of 2025. The monthly MACD histogram suggests that the momentum behind the uptrend in the fourth quarter has started to taper off, which is the corrective price action to start 2025,” Will Tamplin, senior analyst at Fairlead Strategies, told Business Insider.
Ryan Detrick, Carson Group
“Bull markets are like cruise ships: once they start moving, they can be hard to stop. Going back fifty years, when a bull market reached its third year, history said there could be many more left. The five most recent bull markets that have made it this far have lasted at least until their fifth anniversary, with an average gain of eight years, so don’t give up on bull markets in 2025 just yet,” said Ryan Detrick, chief market strategist at Carson. Group told Business Insider.
Craig Johnson, Piper Sandler
“The 10-year UST yield has reversed a long-term downward trend from the 1981 highs. The higher high above 3.25 (’18 highs) also validates the multi-decade reversal. Historically, after an uptrend or downtrend reversal, a retest usually occurs. ” Craig Johnson, chief market engineer at Piper Sandler, told Business Insider.
He added: “We suspect this pullback/pullback to prior resistance to find support around 3.00% – 3.50% will occur in the second half of 2025. A decisive break below that level could indicate that the economy is in serious trouble. Until then, remember that the Fed’s slow and moderate rate cuts have historically been bullish for stocks, especially small and mid-cap stocks.”
Ari Wald, Oppenheimer
“The most important chart we’re watching heading into 2025 is the performance of high momentum stocks versus low momentum stocks, loosely defined as the top gainers vs. top losers over a previous twelve months. We recently reported that the momentum factor historically outperforms the period between the widest point of the cycle, when most stocks participate, and the market’s final peak. Looking ahead, we see two possible scenarios: 1) the bull cycle is further widened due to a catch-up to low momentum (losers); this would be a bullish scenario for all stocks. Ari Wald, CEO of Oppenheimer, told Business Insider.
Jay Woods, Freedom Capital Markets
“2025 is the show-me year when it comes to technology. Investors want results, and software stocks are poised to lead the charge. Technically, we will have seen a fully completed beta base over a two-year period in 2022-2023. It broke out in 2024, but spent most of that time consolidating slightly higher before finally moving upward in late 2024 with a beautiful upside gap (circled) in October,” said Jay Woods, chief market officer. strategist at Freedom Capital Markets, told Business Insider.
He added: “That gap can be used as a perfect risk/reward structure. If there is further weakness in 2025, that 95 level should be the downside risk area to watch. The upside targets look much more likely, making this a sector and trade to watch for 2025. Expect the sector to not only eclipse its recent all-time highs, but add to them by around 20%.”
David Keller, Sierra Alpha Research
“I would look at measures of market breadth, including the upward decline line, the percentage of stocks above their 50-day moving average, and new 52-week highs and lows. The post-election rally in the fourth quarter featured limited leadership, with mega-cap growth stocks accounting for most of the upside while other stocks have struggled. A continued deterioration in breadth through early 2025 could indicate a much weaker start to the year and a greater chance of a corrective move in the sector. Q1,” David Keller, chief market strategist at Sierra Alpha Research, told Business Insider.
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