Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27 before session’s open).
Stocks further extended their uptrend on Monday – are they getting close to short-term highs?
The S&P 500 index gained 0.37% on Monday, following its Friday’s advance of 1.4%, as it extended its last week’s uptrend. The index was the highest since February 16 yesterday. The daily high was at 4,127.66. The S&P 500 keeps advancing from the March 13 local low of 3,909.16.
Stocks are expected to open 0.2% higher this morning. So the broad stock market index will likely reach a new local high, but it may see profit-taking action at some point. The S&P 500 is within its early February topping pattern, and below the important resistance level of 4,200 as we can see on the daily chart:
Futures Contract Trades Above 4,150
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading along the new local highs, and above the 4,150 level. The next resistance level is at around 4,200, and the support level is now at 4,120-4,150.
Conclusion
The S&P 500 index extended its uptrend on Monday as the sentiment further improved despite the recent banking sector news, Fed’s monetary policy worries. There have been no confirmed negative signals so far. However, there are some short-term overbought conditions that may lead to a downward correction.
Here’s the breakdown:
- Stocks will extend their uptrend again this morning.
- The S&P 500 went the highest since mid-February; there may be a profit-taking action and a consolidation at some point.
- In my opinion, the short-term outlook is 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, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
