stock price trading

Stock Trading Alert: Broad Stock Market Extends Its Short-Term Consolidation – Will Uptrend Resume?

July 1, 2014, 7:45 AM

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

Our intraday outlook remains neutral, and our short-term outlook is neutral, following last Tuesday’s intraday reversal:

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

The U.S. stock market indexes were mixed between -0.2% and +0.1% on Monday, as investors continued to hesitate following recent consolidation. Our yesterday’s neutral intraday outlook has proved to be accurate. The S&P 500 index continues to fluctuate slightly below its June 24 all-time high of 1,968.17. For now, it looks like a flat correction within an uptrend. The nearest important level of resistance is at 1,960-1,970, and the support level is at 1,940-1,950. The index remains above month-long upward trend line, which is positive:

Daily S&P 500 index chart - SPX, Large Cap Index

Expectations before the opening of today’s session are positive, with index futures currently up 0.2-0.3%. The main European stock market indexes have gained 0.3-0.6% so far. Investors will now wait for some economic data announcements: Construction Spending, ISM Index at 10:00 a.m. The S&P 500 futures contract (CFD) trades close to its long-term high, just below the level of resistance at 1,960. On the other hand, the support level is at 1,945-1,950, among others, as we can see on the 15-minute chart:

S&P500 futures contract - S&P 500 index chart - SPX

The technology Nasdaq 100 futures contract (CFD) is relatively stronger, as it extends its long-term uptrend, reaching new highs this morning. The nearest important level of support is at around 3,825-3,830, marked by recent local extremes, as the 15-minute chart shows:

Nasdaq100 futures contract - Nasdaq 100 index chart - NDX

Concluding, the broad stock market is in a short-term consolidation, as the S&P 500 index trades slightly below its record high. Will uptrend continue? The beginning of a new quarter favors the bullish case here, however, there is some short-term overbought which may lead to a correction. We think that it is better to stay out of the market at this moment.

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts

Did you enjoy the article? Share it with the others!

Gold Alerts

More

Dear Sunshine Profits,

gold and silver investors
menu subelement hover background