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Stock Trading Alert: Stocks Extend Their Short-Term Gains, But Will They Continue Higher?

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Stock Trading Alert originally published on September 29,  2016, 6:51 AM:

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

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

Intraday outlook (next 24 hours): bearish

Short-term outlook (next 1-2 weeks): bearish

Medium-term outlook (next 1-3 months): neutral

Long-term outlook (next year): neutral

The U.S. stock market indexes gained between 0.2% and 0.6% on Wednesday, extending their short-term uptrend, as investors reacted to economic data releases, among others. The S&P 500 index continues to trade along its July – August consolidation. The nearest important level of resistance is at around 2,160, marked by Monday’s daily gap down of 2,158.54-2,163.97. The next important level of resistance is at around 2,170, marked by previous daily gap down, among others. On the other hand, support level is at around 2,120-2,140, marked by local lows. The market trades within a downward correction following recent rally. Will it continue its uptrend? Or is this some topping pattern before downward reversal?

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Expectations before the opening of today’s trading session are virtually flat. The European stock market indexes have gained 0.7-0.9% so far. Investors will now wait for some economic data announcements: GDP – Third Estimate number, Initial Claims at 8:30 a.m., Pending Home Sales at 10:00 a.m. The S&P 500 futures contract trades within an intraday downtrend, following yesterday’s advance. The nearest important level of resistance is at around 2,170. On the other hand, support level remains at 2,130-2,150, marked by recent consolidation, as we can see on the 15-minute chart:

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The technology Nasdaq 100 futures contract remains relatively stronger than the broad stock market, as it is close to its last week’s new all-time high. However, it currently trades within an intraday downtrend. The nearest important support level is at around 4,850, marked by previous resistance level. The nearest important resistance level is at 4,880-4,900, among others, as the 15-minute chart shows:

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Concluding, the broad stock market slightly extended its short-term uptrend yesterday. Is this a new medium-term uptrend or just upward correction? We still continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). You can trade S&P 500 index using futures contracts (S&P 500 futures contract – SP, E-mini S&P 500 futures contract – ES) or an ETF like the SPDR S&P 500 ETF – SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

Paul Rejczak
Stock Trading Strategist

Stock Trading Alerts

SunshineProfits.com

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Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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