Stock Trading Alert originally sent to subscribers on October 27, 2014, 6:57 AM.
Briefly: In our opinion, speculative short
positions are favored (with stop-loss at 1,975 and profit target at 1,875,
S&P 500 index).
Our
intraday outlook is 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 0.7-0.8% on Friday, extending their recent move up,
as investors reacted to some quarterly corporate earnings releases. The S&P
500 index remains within its late September – early October consolidation. The
nearest important level of resistance is at around 1,870-1,880, marked by some
previous local highs. On the other hand, support level is at 1,930-1,950, among
others, as we can see on the daily chart:
Expectations
before the opening of today’s trading session are slightly negative, with index futures currently
down 0.1-0.2%. The main European stock market indexes have lost between 0.3%
and 0.4% so far. Investors will now wait for the Pending Home Sales number at
10:00. The S&P 500 futures contract (CFD) fluctuates following Friday’s
move up. The resistance level is at around 1,965, marked by local high, and the
nearest important level of support is at 1,950, as the 15-minute chart shows:
The
technology Nasdaq 100 futures contract (CFD) follows a similar path, as it
fluctuates along the level of 4,040. The resistance level is at around 4,050, and
the level of support remains at 4,000-4,020, among others. There have been no
confirmed short-term uptrend reversal signals so far, however, we can see some
overbought conditions:
Concluding,
the broad stock market extended its recent move up, as investors reacted to
better-than-expected quarterly earnings releases. The S&P 500 index is
within its late September – early October consolidation, testing resistance level. We expect short-term uptrend reversal. Therefore, we continue to
maintain our speculative short position. Stop-loss level is at 1,975, and
potential profit target is at 1,875 (S&P 500 index). It is important to set
some exit price level in case some events cause the price to move in an
unlikely direction. Having safety measures in place helps limit potential
losses while letting gains grow.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
