Stocks Reach New Records, but Is There Any Room Left?

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Published : July 12th, 2019
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Category : Opinions and Analysis

The U.S. stock market indexes gained 0.3-0.8% on Wednesday, slightly extending their uptrend, as investors' sentiment improved ahead of quarterly earnings releases, among other factors. The S&P 500 index reached the new record high of 3,002.98 yesterday. It gained more than 270 points from its early June local low of around 2,729. The Dow Jones Industrial Average gained 0.3% and the Nasdaq Composite gained 0.8% on Wednesday.

The nearest important resistance level of the S&P 500 index remains at around 3,000. On the other hand, the support level is at 2,985, marked by the yesterday's daily gap up of 2.981.90-2,984.62. The support level is also 2,975, marked by the previous Wednesday's daily gap up of 2,973.21-2,977.96.

The broad stock market broke above its short-term consolidation on Wednesday a week ago and it got to the 3,000 mark. Is this a real bullish breakout above the last year's September-October topping pattern? The market remains relatively close to the previous medium-term highs:

Positive Expectations, Will Uptrend Continue?

The index futures contracts trade 0.3% above their Wednesday's closing prices, so expectations before the opening of today's trading session are slightly positive. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements today: Consumer Price Index, Unemployment Claims at 8:30 a.m., There will also be another Fed Chair Powell Testimony at 10:00 a.m.

The S&P 500 futures contract trades within an intraday consolidation, as it remains close to the new record high. The nearest important resistance level is at around 3,005. On the other hand, the support level is at 2,985-2,990, among others. The futures contract trades along the last week's high, as the 15-minute chart shows:

Nasdaq 100 Closer to 8,000

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation. The market got closer to the 8,000 mark and it reached the new record high this morning. The support level is now at 7,850-7,900. The Nasdaq futures contract trades along the 7,950 level, as we can see on the 15-minute chart:

Amazon Keeps Rallying

Let's take a look at the Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock broke slightly above the resistance level of $200 a week ago. Then we saw a short-term consolidation, as the market fluctuated below the early May local highs. The resistance level remains at $210-215, and the support level is at $195-200:

Now let's take a look at the daily chart of Amazon.com, Inc. stock (AMZN). The stock broke above its early May local high on Tuesday and it got closer to the price of $2,000. Yesterday it accelerated higher. There is another resistance level of around $2,050, marked by the last year's record high of $2,050.50. On the other hand, the support level is now at $1,970-2,000:

Dow Jones Reaches New Record

The Dow Jones Industrial Average reached the new record high of 26,983.45 yesterday. But then it retraced most of the intraday advance before closing just 0.3% higher. The blue-chip stocks gauge remains close to the 27,000 mark. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions:

Nikkei at the Trend Line

Let's take a look at the Japanese Nikkei 225 index. It continues to trade within a short-term consolidation. The market remains close to its over month-long upward trend line, and the resistance level is still at around 21,800-22,000:

The S&P 500 index reached the new record high yesterday, as investors' sentiment remained bullish following the recent advances. But will the uptrend continue? We may see some more short-term uncertainty following the record-breaking advance.

Concluding, the S&P 500 index will likely open slightly higher today. Then we may see some short-term profit-taking action. Investors will wait for another Fed Chair Powell Testimony at 10:00 a.m.

If you enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. Sign up today!

Thank you.

Paul Rejczak
Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care

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Przemyslaw Radomski is the founder, owner and the main editor of www.SunshineProfits.com. Being passionately curious about the market’s behavior he uses his statistical and financial background to question the common views and profit on the misconceptions. “Don’t fight the emotionality on the market – take advantage of it!” is one of his favorite mottos. His time is divided mainly to analyzing various markets with emphasis on the precious metals, managing his own portfolio, writing commentaries, essays and developing financial software. Most of the time he’s got left is spent on reading everything he can about the markets, psychology, philosophy and statistics. Mr. Radomski has started investigating the markets for his private use well before starting his professional career. He used to work as an informatics consultant, but this time-consuming profession left him little time for his true passion – the interdisciplinary market analysis. Establishing www.SunshineProfits.com gave him the opportunity to put his thoughts, ideas, and experience into form available to other investors.
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