Stock Trading Alert originally sent to subscribers on December 18, 2014, 6:46 AM.
Briefly: In our opinion, speculative short
positions are favored (with stop-loss at 2,025 and profit target at 1,950,
S&P 500 index).
Our
intraday outlook remains bearish, and our short-term outlook is bearish:
Intraday
(next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S.
stock market indexes gained between 1.7% and 2.0% on Wednesday, retracing some
of their recent move down, as investors reacted to FOMC Rate Decision release,
among others. The S&P 500 index bounced off support level at around
1,970-1,975, marked by Tuesday’s daily low. It has returned above the level of
2,000, which is positive. The nearest important level of resistance is at
around 2,025-2,035, marked by some previous local lows, as we can see on the
daily chart:
Expectations
before the opening of today’s trading session are positive, with index futures
currently up 1.1-1.3%. The main European stock market indexes have gained
1.0-2.5% so far. Investors will now wait for some economic data announcements:
Initial Claims at 8:30 a.m., Philadelphia Fed number, Leading Indicators at
10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as
it trades considerably higher this morning. The nearest important level of
support remains at around 2,000-2,010. On the other hand, possible resistance
level is at around 2,050, marked by some previous local extremes, as the
15-minute chart shows:
The
technology Nasdaq 100 futures contract (CFD) follows a similar path, as it remains
in an intraday uptrend. The nearest important support level is at 4,180-4,200.
For now, it looks like a correction within a short-term downtrend, however a
positive downtrend reversal scenario cannot be excluded here:
Concluding,
the broad stock market bounced off support level, as the S&P 500 index
continued to fluctuate along the level of 2,000 yesterday. Expectations before
the opening of today’s trading session are very positive, however, we still continue
to maintain our short position with entry point at 2,038 (November 12th
opening price of the S&P 500 index). Stop-loss is at 2,025 and potential
profit target remains at 1,950 (S&P 500 index). 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
