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 extended its uptrend once again – is a correction at hand?
The S&P 500 index gained 0.74% on Monday as it further extended its almost month-long rally. It reached new medium-term high of 4,557.11 and it was the highest since August 2.
Recently the S&P 500 broke above the resistance level marked by the technically important September 21 daily gap down of around 4,376-4,401. Stocks rallied despite uncertainty about monetary policy, economic growth and geopolitics. The market resumed its rally from October 27 local low of 4,103.78 and yesterday the market got close to another important resistance level, marked by the August 2 daily gap down of 4,550.93-4,567.53.
Stocks are expected to open 0.3% lower today. So the market will likely trade within a short-term consolidation ahead of today’s important quarterly earnings release from NVDA. The report will be released after the session’s close. The index continues to trade along its month-long upward trend line as we can see on the daily chart:
Futures Contract Trades Close to 4,550
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the recent trading range and it got close to the resistance level of around 4,550-4,570, marked by previous local high, among others. On the other hand, the support level is now at 4,500-4,520.
Conclusion
The S&P 500 will likely open lower today and the market may retrace some of its yesterday’s advance. There have been no confirmed negative signals so far. However, there are short-term overbought conditions that may lead to a correction at some point. Investors will be waiting for the important quarterly earnings release from NVDA – today after the session’s close.
Here’s the breakdown:
- The S&P 500 extended its uptrend yesterday; investors will be waiting for the NVDA earnings release.
- There may be a downward correction at some point.
- In my opinion, the short-term outlook is still 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
