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 remains above 4,500 - will the uptrend continue?
The S&P 500 index gained 0.12% on Thursday, following its Wednesday’s advance of 0.2%. The stock market trades within a consolidation and a flat correction of the uptrend. On Wednesday the index reached new medium-term high of 4,521.17 and it was the highest since September 1.
Recently the index 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.
Stocks will likely open 0.2% higher this morning, so the index may further extend its short-term fluctuations. It continues to trade above 4,500 level as we can see on the daily chart:
Futures Contract Remains Close to Highs
Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently the market has accelerated its rally and on Tuesday it broke above the 4,500 level. The resistance level remains at around 4,550-4,570, marked by the previous local high. On the other hand, the support level is at 4,480-4,500.
Conclusion
The S&P 500 index is still trading sideways following Tuesday’s rally caused by lower-than-expected CPI release. 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.
Here’s the breakdown:
- The S&P 500 continues to trade above 4,500 level.
- 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
