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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: 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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