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Paul Rejczak

Paul Rejczak

Writer, Sunshine Profits

Stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market…

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Stock Trading Alert: Short-Term Uncertainty As Stocks Fluctuate, Is Correction Over?

Stock Trading Alert originally published on June 16, 2014, 7:07 AM:


 

Briefly: In our opinion speculative long positions are still favored (with stop-loss at 1,910, S&P 500 index).

Our intraday outlook is neutral, and our short-term outlook remains bullish:

Intraday (next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: bullish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes gained 0.3% on Friday, retracing some of their recent decline, as investors bet that stocks would resume long-term uptrend following last week's downward correction. The S&P 500 index bounced off the support level of 1,915-1,925, marked by late May - early June consolidation. On the other hand, the resistance remains at 1,950-1,955, marked by June 09 all-time high of 1,955.55. For now, it looks like a correction within an uptrend, however, some further move down cannot be excluded. The important support level remains at the psychological 1,900, as we can see on the daily chart:

S&P500 Daily Chart
Larger Image

Expectations before the opening of today's session are slightly negative, with index futures currently down 0.2-0.3%. The European stock market indexes have lost between 0.2% and 0.5% so far. Investors will now wait for some economic data announcements: Empire Manufacturing number at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., NAHB Housing Market Index at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it trades along the level of 1,930. For now, it looks like a flat correction following last-week's decline. However, there is some relatively strong support level at around 1,915-1,925, as the 15-minute chart shows:

S&P500 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates in a relatively narrow trading range. The resistance remains at the psychological 3,800. On the other hand, the support level is at 3,750, among others:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market is in a short-term consolidation, following recent move down. It is hard to say whether this is a correction within a new downtrend, or some sort of a bottoming consolidation. We remain cautiously optimistic, expecting more upside. Therefore, we continue to maintain our already profitable long position, with stop-loss at 1,910 (S&P 500 index).

Thank you.

 

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