TECHNICAL ANALYSIS: S&P 500 stock index seen to be bearish in short term | Fin24
 
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TECHNICAL ANALYSIS: S&P 500 stock index seen to be bearish in short term

Oct 23 2018 14:31
Colin Abrams


The S&P 500 index, which is the most important stock index in the world, has bearing on the JSE and world stock markets in general. The chart below shows our view going forward.

S&P 500 index

Recommendation: Sell short/then go long lower down

Current Trend: Short and med-term down. Long-term up

Strategy: Traders sell short at current levels. Then look to go long from line 4.  

(Daily)

chart.



Chart Setup: The S&P recently broke down below a significant support level of line 1. After a recent relief rally, it’s heading down again and is likely to go lower before it has a larger relief rally.  

• Its short-term Stochastic (on top) is heading back towards it oversold region, and is short-term bearish.

Strategy Details: Traders sell short at current levels. Then look to close shorts near line 4 (2700/2698), and go long on a reversal day up from/near there.

Target: A retest of its recent low of 2710, with support at line 4 (2700/2698). For a good relief rally thereafter, look to take profits at line 3 resistance at 2797.
 
Stop-loss: Use an intraday break of its prior two-day high to exit. From 2730 lower it to a breaking of is prior one-day high. For going long a reversal up from line 4, the stop will be a closing price below 2690.

  • Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend trading courses, please go to www.themarket.co.za

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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