Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): long positions with entry at 4,225 price level, 4,010 as a stop-loss and 4,470 as an initial price target.
Stocks went lower on Friday, as the S&P 500 index crossed the 4,100 level. Will we see new yearly lows this morning?
The S&P 500 index lost 0.57% on Friday following its Thursday’s 3.6% sell-off. Investors were still selling stocks following Wednesday’s Fed’s interest rate hike decision. The market went below the 4,100 level, but it remained above its Monday’s local low of 4,062.51. This morning it will likely get closer to that level, as the index is expected to open 1.4% lower. There’s still an uncertainty concerning weakening economy and the Russia-Ukraine conflict.
Futures Contract Remains Below the 4,100 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading along the last week’s local low. The support level remains at around 4,000-4,050.
We are maintaining our long position from the 4,225 level. We are still expecting an upward correction from the current levels. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index will likely extend its Friday’s decline, as it may open 1.4% lower this morning. It still looks like a bottoming pattern following April decline, however, if the market breaks below the psychological 4,000 level, we may see some further declines.
Here’s the breakdown:
- The S&P 500 index remains close to the yearly lows following Friday’s decline below the 4,100 level.
- In our opinion a speculative long position (from the 4,225 price level) is justified from the risk/reward perspective - 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 4,225 price level, 4,010 as a stop-loss and 4,470 as an initial price target.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
