Exchange traded funds tracking the S&P 500 are testing their 200-day simple moving average, a technical level has kept a lid on U.S. equity rallies over the past month.

SPDR S&P 500 ETF (NYSEArca: SPY) and iShares S&P 500 (NYSEArca: IVV) rose about 1% on Monday with markets looking for European leaders to announce measures to fight the debt crisis at a summit later this week.

The S&P 500 closed Monday a little under 1,260. The index has already moved above both its 50-day and 200-day exponential moving averages. [Resistance Test at Hand for S&P 500 ETFs]

According to Bespoke Investment Group, the S&P 500 has broken its short-term downtrend from late October, and the next key technical level to watch is 1,265, which is the 200-day simple moving average. The benchmark has failed to make a sustained break above the level the past month, and the bulls hope the third time’s the charm.

All Star Charts notes that the Dow Jones Transportation Average is also trying to break above its 200-day moving average for the first time since early August.

iShares S&P 500

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