Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are currently justified from the risk/reward point of view.

Stocks slightly extended their uptrend on Friday – will the S&P 500 break above 4,000 mark?

The S&P 500 index gained 0.40% on Friday, as it closed just below the 4,000 level. The market reached new local high of 4,003.95 and it was the highest since December 14. Recently the broad stock market broke above its three-week-long trading range before retracing more of the mid-December’s decline.

The broad stock market index will likely open 0.1% higher this morning. So it may further extend the uptrend. However, we may see some short-term uncertainty and a possible profit-taking action at some point, as investors will be waiting for more economic data releases along with the quarterly earnings. The index retraced most of its December decline, as we can see on the daily chart:

Futures Contract – Short-Term Consolidation

Let’s take a look at the hourly chart of the S&P 500 futures contract. It continues to trade along the 4,000 level. The resistance level remains at around 4,000-4,050 and on the other hand, the support level is at 3,950, among others.

Conclusion

The S&P 500 index will likely fluctuate along the 4,000 level, as it may see uncertainty following the recent advances. Profit-taking may come at some point, however, there have been no confirmed negative signals and the market remains within an uptrend after breaking above the recent trading range.

Here’s the breakdown:

• The S&P 500 index will likely fluctuate along the 4,000 level.
• Investors will be waiting for the coming earnings and economic data releases.
• In my opinion, the short-term outlook is still bullish and long positions are justified from the risk/reward point of view.

As always, we’ll keep you, our subscribers, well-informed.

Trading position (short-term, my opinion; S&P 500 futures contract): Long positions are currently justified from the risk/reward point of view.

Thank you.

Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care