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Paul Rejczak

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Stock Trading Alert: New Downtrend Or Just Another Pull-Back? No Clear Direction So Far

Stock Trading Alert originally published on April 20, 2015, 6:43 AM:


 

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

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

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

The U.S. stock market indexes lost between 1.1% and 1.6% on Friday, retracing their recent move up, as investors reacted to economic data announcements, quarterly corporate earnings releases. The S&P 500 index bounced off its resistance level at 2,100-2,120, marked by February 25 all-time high of 2,119.59, among others. On the other hand, the nearest important level of support remains at around 2,070, marked by local lows. There is no clear medium-term direction, 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 0.4-0.5%. The main European stock market indexes have gained 0.7-1.3% so far. Investors will now wait for further quarterly corporate earnings releases. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it retraces some of its Friday's selloff. The nearest important level of resistance is at 2,090-2,100, and support level is at 2,075-2,080, among others:

S&P500 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces some of its Friday's move down. The nearest important level of support remains at 4,350, and resistance level is at 4,380-4,440, as the 15-minute chart shows:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market bounced off its medium-term resistance level on Friday. However, the expectations before the opening of today's trading session are positive. For now, it looks like further medium-term consolidation, following last year's October-November rally. We still 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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