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 volatile consolidation on Friday, as Ukraine conflict kept dominating headlines. Is this a medium-term bottoming pattern?

The S&P 500 index lost 1.30% on Friday, Mar. 11 after bouncing from the short-term resistance level of 4,300. The broad stock market continued to fluctuate within a consolidation. On Tuesday it reached the local low of 4,157.87 and then we’ve seen a rebound to the 4,300 level. On Feb. 24 the index fell 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. This morning the S&P 500 index is expected to open 0.5% higher and we may see further consolidation.

The nearest important resistance level is at 4,300, and the next resistance level is at 4,350-4,400, among others. On the other hand, the support level remains at 4,150-4,200. The S&P 500 index continues to trade above the recently broken downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

Futures Contract Trades Along the 4,200 Level

Let’s take a look at the hourly chart of the S&P 500 futures contract. It trades within a consolidation along the 4,200 level. The support level remains at around 4,150.

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 is expected to open 0.5% higher this morning, so it will likely extend a short-term consolidation. We may see some more uncertianty, as investors will be waiting for the Wednesday’s FOMC Statement release.

Here’s the breakdown:

• The S&P 500 index will likely open higher, but we may see more fluctuations.
• We are maintaining our long position (opened on Feb. 22 at 4,340).
• We are still 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