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).
S&P 500 reached new medium-term high on Friday, but will the uptrend continue?
The S&P 500 index lost 0.14% on Friday after reaching new medium-term high of 4,212.91. The broad stock market’s gauge went the highest since last year’s August as investors’ sentiment further improved following economic data releases, debt ceiling deal talks, among other factors. On May 4 the S&P 500 fell to the local low of 4,048.28, but it quickly got back to around 4,150. Last week it broke above the recent trading range.
Stocks are expected to open virtually flat this morning. The market may see a short-term profit taking action as the index is at a potential resistance level of 4,200. The S&P 500 reached new medium-term high as we can see on the daily chart:
Futures Contract Trades Above 4,200
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading slightly above the 4,200 level this morning. The support level is now at 4,180-4,200, marked by the previous resistance level.
Conclusion
The S&P 500 will likely fluctuate following the Friday’s rally and it may see a profit-taking action at some point. The stock market keeps extending its uptrend from the mid-March local low.
Here’s the breakdown:
- The S&P 500 went back to the 4,200 level last week, it is the highest since last year’s August.
- There have been no confirmed negative signals so far.
- In my opinion, the short-term outlook is bullish and long positions are still 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).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
