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 extend their consolidation - is this just a flat correction?
The S&P 500 index lost 0.01% on Wednesday, as it continued sideways following the recent advances. On Tuesday it reached new medium-term high of 4,169.48 and yesterday it closed slightly above the 4,150 level again. The index keeps advancing from its March 13 local low of 3,909.16. Last week it rallied ahead of the coming quarterly earnings releases, among other factors.
Stocks are expected to open 0.8% lower this morning. So the S&P 500 will came back closer to the 4,100 level. The index continues to trade 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 Broke Below the Trend Line
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading slightly below the 4,150 level. The next support level is at 4,100-4,120, and the resistance level remains at 4,175-4,200.
Conclusion
The S&P 500 index will likely retrace some of its recent advances this morning. Stock prices will open lower following quarterly earnings releases. However, there have been no confirmed negative signals so far and for now it looks like a correction within an uptrend.
Here’s the breakdown:
- The S&P 500 is still trading within a consolidation following the recent advances.
- There have been no confirmed negative signals.
- 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 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
