stock price trading

Stock Trading Alert: Stocks poised to correct their recent gains

October 23, 2013, 6:50 AM

The U.S. stock market indexes gained between 0.2% and 0.6% on Tuesday, extending their long-term uptrend, as investors reacted to the unemployment report release for the month of September that was delayed by the government shutdown. The S&P 500 index reached a new all-time high of 1,759.33, gaining 0.6% for the day. The nearest important support is at the psychological 1,750. The index broke above the upper limit of a medium-term upward channel, which is a positive signal. However, the market may correct its recent rally. The support is at 1,733.45-1,735.74, marked by last Friday’s daily gap up, and the next support is at 1,729.86, marked by the September 19 high, as we can see on the daily chart:

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

Expectations before the opening of today’s session are negative, with index futures currently down between 0.5% and 0.7%. The main European stock market indexes have lost 0.5-1.0% so far. Everything tends to show that the U.S. stock market will enter a correction of the recent uptrend. The S&P 500 futures contract (CFD) bounced off the level of resistance at around 1,750. The nearest short-term support is at 1,730-1,735, marked by the recent consolidation, as we can see on the 15-minute chart:

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

Our intraday outlook is bearish, and our short-term outlook is now bearish, as there may be some further selling pressure due to profit taking following recent rally:

Intraday outlook: bearish
Short-term outlook: bearish
Medium-term outlook: neutral
Long-term outlook: bullish

The above analysis is the first of today's 2+ Stock Trading Alerts. Stay as updated as possible on the current events and trends on the stock market by choosing our Stock Trading Alert subscription service

Thank you,
Paul Rejczak

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