Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): long positions with entry at 4,340 price level, with 4,020 as a stop-loss and 4,640 as an initial price target.
Stocks extended their downtrend on Tuesday, as the S&P 500 index got closer to the late February low. Will the market reverse upwards?
The S&P 500 index lost 0.72% on Tuesday following its Monday’s sell-off of 2.95%. The broad stock market’s gauge tanked on more headlines about the ongoing Ukraine situation. Yesterday it fell to the daily low of 4,157.87 after bouncing from the daily high of 4,276.94. On Feb. 24 the index fall to the local low of 4,114.65 and it was 704 points or 14.6% below the January 4 record high of 4,818.62. There’s still a lot of uncertainty concerning the ongoing Ukraine conflict. However, this morning the S&P 500 index is expected to open 1.8% higher after an overnight rebound.
The nearest important resistance level is now at 4,200, and the next resistance level is at 4,275-4,300, among others. On the other hand, the support level is at 4,125-4,150. The S&P 500 index came back to its recently broken downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Futures Contract – Consolidation Following the Recent Decline
Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it broke below the short-term consolidation. Yesterday it fell to around 4,150, before bouncing back to the 4,200-4,250 level.
We are still maintaining our long position from the 4,340 level, as we are expecting an upward correction from the current levels (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index came closer to its late February low yesterday on more Russia-Ukraine conflict headlines. There’s still a lot of news-driven volatility. Today the broad stock market is expected to open 1.8% higher, as investors are shrugging off the bad news. For now, it looks like a rebound, but it may also be some more meaningful reversal.
Here’s the breakdown:
- The S&P 500 index went closer to its late February low yesterday; this morning it is set to retrace some of the recent declines.
- We are maintaining our long position (opened on Feb. 22 at 4,340).
- We are expecting an upward correction from the current levels.
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 4,020 as a stop-loss and 4,640 as an initial price target.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
