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 retraced some of their rally on Friday – was it a downward reversal?
The S&P 500 index lost 0.37% on Friday after rallying to the new medium-term high of 4,448.47. It further extended its uptrend after breaking above the previous local highs in late May. On Friday the S&P 500 was the highest since April of 2022.
There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but overall, the investors’ sentiment remains bullish.
Stocks are expected to open 0.3% lower this morning, so the index will extend its Friday’s correction slightly. The S&P 500 is trading above its month-long upward trend line and above a steeper short-term trend line as we can see on the daily chart:
Futures Contract Trades Below 4,450
Let’s take a look at the hourly chart of the S&P 500 futures contract. It rallied up to around 4,500 level on Friday. Today it’s trading below the 4,450 level. The resistance level is at 4,500 and the support level is at 4,000-4,420, among others.
Conclusion
The S&P 500 index will slightly extend its Friday’s intraday decline this morning. The market may fluctuate following its recent rally. There have been no confirmed negative signals so far. However, stocks may extend a profit-taking action following the rally.
Here’s the breakdown:
- The S&P 500 will likely fluctuate following its recent rally.
- 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
