Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
Stocks were mixed on Monday following their last week’s record-breaking rally. Was that rally a buyers’ euphoria that will put an end to the medium-term uptrend?
For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch today's video.
Video Technical Breakdown is an addition to the STA, distributed on Tuesday and Thursday along with the premium analysis, to keep you, our subscribers, well-informed with everything happening on the charts.
The S&P 500 index gained 0.09% on Monday, Nov. 8, as it fluctuated within its Friday’s daily trading range. On Friday the broad stock market index reached the new record high of 4,718.50. And yesterday it remained close to the 4,700 level. The recent rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seems overbought in the short-term and most likely it’s trading within a topping pattern. Today we may see another consolidation or a profit taking action.
The nearest important support level is at 4,650-4,675 and the next support level is at 4,600. On the other hand, a potential resistance level is now at 4,700-4,720. The S&P 500 trades along a steep short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Futures Contract Trades Along the 4,700 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. The market fluctuates along the 4,700 level. It also remains above a week-long upward trend line.
Our short position was closed at the stop-loss level of 4,680 on Friday. In our opinion no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
The broad stock market was flat on Monday, as investors took short-term profits off the table. It still looks like a topping pattern and we may see a consolidation or a downward correction at some point. There may be a profit-taking action following quarterly earnings releases. Today the main indices are expected to open virtually flat and we may see another intraday consolidation.
Here’s the breakdown:
- The S&P 500 extended its uptrend last week, and today it is expected to virtually flat following yesterday’s uncertainty.
- Our speculative short position was closed at the stop-loss level on Friday.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
