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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: More Uncertainty As Stocks Go Sideways - Will Uptrend Continue?

Stock Trading Alert originally published on May 14, 2015, 6:18 AM:


 

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)

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

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

The U.S. stock market indexes were virtually flat on Wednesday, as investors hesitated following recent fluctuations. The S&P 500 index extends its medium-term consolidation along the level of 2,100. The nearest important level of resistance is at around 2,120-2,125, marked by late April all-time high of 2,125.92. On the other hand, support level is at 2,070-2,080. There have been no confirmed negative signals so far, however, we can see negative technical divergences:

S&P500 Daily Chart
Larger Image

Expectations before the opening of today's trading session are positive, with index futures currently up 0.4-0.6%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims, Producer Price Index at 8:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it retraces yesterday's move down. The nearest important level of resistance is at around 2,110-2,115, marked by local highs. On the other hand, support level remains at 2,090, 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 retraces yesterday's decline. The nearest important level of resistance is at 4,450-4,460, and support level is at 4,400-4,420, among others, as we can see on the 15-minute chart:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market extends its short-term fluctuations along the level of 2,100, as the S&P 500 index remains relatively close to late April all-time high. There have been no confirmed negative signals so far. However, we continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

 

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