S&P 500 Remains Close to 4,000 – Will It Break Higher?
Stock prices extend their consolidation - will they resume the uptrend?
The S&P 500 index lost 0.16% on Tuesday as it continued to fluctuate below the 4,000 level. Last week on Wednesday the daily high was at 4,039.40 and the index was the highest since March 7. On the other hand, Friday’s daily low was at 3,909.16.
Stocks are expected to open 0.8% higher this morning, so the index will get closer to the 4,000 level again. The market is going sideways after its mid-March rebound as we can see on the daily chart:
Futures Contract Trades Above 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday it broke below the 4,000 level, but it quickly rebounded and today it’s trading along the 4,030 level. The resistance level is at around 4,050-4,100 and the support level is at 3,950-3,980.
The S&P 500 will likely advance this morning as global markets’ sentiment is improving despite banking crisis, Fed’s monetary policy fears. The index is still trading within a consolidation following mid-March rebound. For now, it looks like a flat correction within an uptrend.
Here’s the breakdown:
- Stocks are expected to open higher this morning, but the S&P 500 may further extend its consolidation along the 4,000 level.
- In my opinion, the short-term outlook is bullish and long positions are justified from the risk/reward point of view.
Stock Trading Strategist