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President Donald Trump has an…

Paul Rejczak

Paul Rejczak

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: Stocks Regain Some Ground After Recent Move Down

Stock Trading Alert originally published on January 8, 2015, 6:30 AM:


 

Briefly: In our opinion, no speculative positions are justified.

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

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

The U.S. stock market indexes gained 1.2% on Wednesday, retracing some of their recent sell-off, as investors hunted for bargains. The S&P 500 index bounced off support level at around 2,000, marked by previous local extremes, among others. The next support level is at 1,970-1,980, marked by December local lows. On the other hand, resistance level is at 2,040-2,050, marked by previous support level. For now, it looks like an upward correction within a short-term downtrend, which is within a volatile medium-term consolidation, as we can see on the daily chart:

S&P500 Daily Chart
Larger Image

Expectations before the opening of today's trading session are positive, with index futures currently up 0.8-0.9%. The main European stock market indexes have gained between 1.4% and 2.0% so far. Investors will now wait for some economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims at 8:30 a.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, following yesterday's move up. The nearest important resistance level is at around 2,040-2,050. On the other hand, support level remains at 2,000-2,020:

S&P500 15-Minute Chart
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The technology Nasdaq 100 futures contract (CFD) is in a relatively narrow intraday trading range, following yesterday's rebound. The nearest important level of resistance is at around 4,190-4,200, marked by previous support level, as the 15-minute chart shows:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market retraced some of its recent sell-off on Wednesday, as investors reacted to oil prices rebound, among others. For now, it looks like a volatile medium-term consolidation following last year's October-November rally. We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Thank you.

 

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