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).
Stocks rallied on Friday and today they may extend the uptrend – is the market overbought?
The S&P 500 index gained 1.30% on Friday as it broke above the 4,200 level. It was the highest since May 19 following Wednesday’s NVDA quarterly earnings release, among other factors. Earlier stock prices were going down amid short-term profit-taking action caused by the debt ceiling deal fears.
Stocks will likely open 0.5% higher this morning as investors’ sentiment remains bullish following long holiday weekend and a debt ceiling deal news. The S&P 500 retraced all of its recent correction as we can see on the daily chart:
Futures Contract Remains Above 4,200
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading above the 4,230 level this morning. The support level is now at 4,200-4,220, marked by the recent resistance level. On the other hand the resistance level is at 4,250-4,300.
Conclusion
The S&P 500 is expected to open 0.5% higher this morning so it will likely reach new medium-term high following a weekend debt ceiling deal news and overall bullish sentiment caused by technology stocks’ rally. However, the market may see a short-term profit-taking action at some point.
Here’s the breakdown:
- The S&P 500 will likely reach new medium-term high this morning.
- Stock prices are expected to break higher on debt ceiling deal, among other factors.
- 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
