Stock Trading Alert: Stocks Consolidate Following Recent Selloff

By: Paul Rejczak | Wed, Feb 5, 2014
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Stock Trading Alert originally published on Feb 05, 2014, 6:56 AM:


 

Our intraday outlook is neutral, and our short-term outlook remains bearish:

Intraday (next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: neutral
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

The U.S. stock market indexes gained between 0.5% and 0.9% yesterday, bouncing off recent lows, as investors hoped for a short-term downtrend reversal. The S&P 500 index traded within the lower half of Monday's trading range, below the resistance off 1,770-1,775, marked by previous support. On the other hand, there is a possible support at around 1,730, marked by last September's local high of 1,729.86. For now, it looks like a rather flat correction following recent sharp decline, as we can see on the daily chart:

SPX Daily Chart
Larger Image

Expectations before the opening of today's session are negative, with index futures currently down 0.2-0.3%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: ADP Employment Change report at 8:15 a.m., ISM Services number at 10:00 a.m. The S&P 500 futures contract (CFD) remains in a relatively narrow trading range, extending consolidation following Monday's selloff. The support is at around 1,735-1,740, and the resistance is at 1,750:

SPX Daily Chart 2
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The technology Nasdaq 100 futures contract (CFD) bounced off Monday's low, however, there is no clear trend, just a consolidation following recent move down. The resistance is at around 3,470, and the support is at 3,425-3,430, as the 15-minute chart shows:

NASDAQ 100 Futures Daily Chart
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Thank you.

 


 

Paul Rejczak

Author: Paul Rejczak

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
SunshineProfits.com

Paul Rejczak

Stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market behavior based on both traditional and innovative methods of technical analysis. Paul has made his name by developing mechanical trading systems. Paul is the author of Sunshine Profits' premium service for stock traders: Stock Trading Alerts.

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