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.

The S&P 500 index trades within a consolidation along the 4,500 level. Is this a short-term topping pattern or just some flat correction within an uptrend?

The broad stock market index gained 1.43% on Thursday following its Wednesday’s loss of 1.2%. It continues to fluctuate along the 4,500 level. The S&P 500 index gained 360 points in a little more than a week after bouncing from the previous Monday’s local low of around 4162. There have been no confirmed negative signals so far.

There’s still a lot of uncertainty concerning the ongoing Ukraine conflict, but investors were recently jumping back into stocks despite that geopolitical uncertainty. This morning the index is expected to open 0.3% higher.

The nearest important resistance level is at around 4,550-4,600, marked by the previous local highs. On the other hand, the support level is at 4,400-4,450. The S&P 500 index trades within its early February consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

Futures Contract Reaches New Local Highs

Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading at the new local highs after getting back above the 4,500 level. There have been no confirmed negative signals so far.

We are maintaining our profitable long position from the 4,340 level, as we are still expecting a bullish price action in the near-term (chart by courtesy of http://tradingview.com):

Conclusion

The broad stock market is expected to open slightly higher this morning and the S&P 500 will likely reach the new local high. There are some short-term overbought conditions and we may see a profit-taking action at some point. The war In Ukraine remains a negative factor for the markets.

Here’s the breakdown:

• The S&P 500 index got back above the 4,500 level following its Wednesday’s quick downward correction.
• We are maintaining our profitable long position (opened on Feb. 22 at 4,340).
• We are still expecting an advance 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