Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): long positions with entry at 4,340 price level, with 4,440 as the stop-loss (take profit) and 4,740 as the price target.
The S&P 500 index bounced within a short-term consolidation yesterday. The market is fluctuating after its March rally. But will the uptrend continue?
The broad stock market index gained 0.81% on Monday, as it extended its Friday’s advance of 0.3%. The S&P 500 is trading within a consolidation after rallying from the March 14 local low of around 4,162. The market has recently broken below the 4,600 level and on Friday it traded closer to the 4,500 level. For now it looks like a correction or a consolidation. This morning the index is expected to open 0.3% lower. We may see some further short-term uncertainty.
Futures Contract Is Going Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke below the upward trend line last week and it got back below its local highs from February. So is this a reversal? For now it looks like a correction and we are still maintaining our profitable long position from the 4,340 level. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index is expected to open slightly lower this morning and we may see some further short-term volatility. It looks like a profit-taking action following big March rally from the local lows below the 4,200 level.
However, it may also be a topping pattern before some more meaningful downward reversal. Therefore, we’ve recently moved our take-profit/ exit level upwards.
Here’s the breakdown:
- The S&P 500 index trades within a short-term consolidation; for now it’s a flat correction within an uptrend.
- We are maintaining our profitable long position (opened on Feb. 22 at 4,340).
- We are still expecting some upside from the current levels; however, it is time to get more cautious as there may be a bigger downward correction at some point.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): long positions with entry at 4,340 price level, with 4,440 as the stop-loss (take profit) and 4,740 as the price target.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
