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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: Stocks Got Closer To Record Highs - New Uptrend Or Just More Consolidation?

Stock Trading Alert originally published on November 10,  2016, 6:55 AM:


 

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

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains neutral, following S&P 500 index breakout above last year's all-time high:

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): neutral

The main U.S. stock market indexes gained between 0.4% and 1.4% on Wednesday, as investors reacted to U.S. presidential elections outcome, following very sharp overnight futures sell-off. The S&P 500 index broke above the resistance level of 2,150-2,160, marked by previous local highs. The next resistance level is at 2,180-2,200, marked by record high. On the other hand, support level is at 2,100-2,120, marked by previous resistance level. The next important level of support remains at around 2,080, marked by recent local lows, 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 0.6-0.8%. The European stock market indexes have gained 0.6-1.1% so far. Investors will now wait for the Initial Claims number release at 8:30 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it extends its yesterday's rally. The nearest important level of resistance is at around 2,180-2,200, marked by previous consolidation along record highs. On the other hand, support level remains at 2,150, among others:

S&P500 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures follows a similar path, as it currently trades within an intraday uptrend, extending its yesterday's rally. The nearest important level of resistance is at 4,880-4,900. On the other hand, support level is at 4,780-4,800, marked by short-term consolidation, as the 15-minute chart shows:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market (S&P 500 index futures contract) was very volatile yesterday, as investors reacted to the U.S. presidential election news. Stocks extended their short-term uptrend, as the S&P 500 index got closer to record high again. We decided to close our profitable short position (opened on July 18 at 2,162 - S&P 500 index) at the opening of last week's Friday's trading session - the average opening price of the S&P 500 index was at 2,085. Overall, we gained 77 index points on that over three-month-long speculative short trade following June - July rally off "Brexit" low. Currently, 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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