• 7 hours 3 Restaurant Stocks In Full Recovery Mode
  • 15 hours Bitcoin Is Driven By Testosterone
  • 5 days Quantum Computing Is The Newest Megatrend In Silicon Valley
  • 7 days How To Invest In The Cybersecurity Boom
  • 8 days Investors Are Patient With Unprofitable Giants
  • 10 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 12 days 5 Stocks To Keep A Close Eye On This Year
  • 14 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 14 days Central America Is Ready For The Bitcoin Hustle
  • 16 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 17 days Top Performing Stocks As Inflation Fears Grow
  • 18 days US Airline Stocks Take A Beating On New EU Restrictions
  • 19 days This IPO Could Open Sustainable Fashion Floodgates
  • 20 days Crypto Crime Nets Another $2B Fraudster
  • 22 days This Week’s Hottest Meme Stocks
  • 24 days Why World Markets Should Be Watching Germany Closely
  • 26 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 28 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 30 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 31 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
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…

Contact Author

  1. Home
  2. Markets
  3. Other

Stock Trading Alert: More Uncertainty Ahead Of Quarterly Earnings Releases, Still Close To Last Year's Highs

Stock Trading Alert originally published on April 18, 2016, 6:50 AM:


 

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,100, and profit target at 1,950, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence:

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

The U.S. stock market indexes lost 0.1-0.3% on Friday, extending their short-term uncertainty as investors awaited quarterly corporate earnings, economic data releases. The S&P 500 index continues to trade close to its last year's local highs. The nearest important level of resistance is at around 2,100-2,120. On the other hand, support level is at 2,030-2,040, marked by recent consolidation, and the next level of support is at 2,000-2,020, marked by previous level of resistance. The index continues to trade within a descending medium-term trading channel. There have been no confirmed short-term negative signals so far. However, we still can see overbought conditions:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.2-0.3%. The main European stock market indexes have been mixed so far. The S&P 500 futures contract trades within an intraday uptrend, following lower opening. The nearest important level of support is at around 2,055-2,060, marked by local low. On the other hand, resistance level is at 2,080, marked by Friday's local high, among others. There have been no confirmed negative signals so far. However, we can see some overbought conditions accompanied by an increased volatility. Is this a short-term topping action?

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract follows a similar path, as it retraces its earlier decline. The nearest important level of resistance is at around 4,540-4,560, marked by last week's local high. On the other hand, support level remains at 4,500, as we can see on the 15-minute chart:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market was virtually flat on Friday, as investors remained uncertain ahead of quarterly corporate earnings releases. The S&P 500 index broke above its consolidation along the level of 2,050 recently. We still can see technical overbought conditions that may lead to uptrend's reversal or downward correction. Therefore, we continue to maintain our speculative short position (opened at 2,045.56 - last week's Wednesday's opening price of the S&P 500 index). Stop-loss level is at 2,100 and potential profit target is at 1,950 (S&P 500 index). 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.

 

Back to homepage

Leave a comment

Leave a comment