Stock Trading Alert: Uncertainty Following Recent Rally

By: Paul Rejczak | Tue, Feb 18, 2014
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Stock Trading Alert originally published on Feb 18, 2014, 6:52 AM


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

Intraday (next 24 hours) outlook: bearish
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 0.1% and 0.8% on Friday, extending their recent rally as investors continued to buy stocks at higher levels. The S&P 500 index got close to its January 15 all-time high of 1,850.84 (Friday's daily high at 1,841.65). The nearest important resistance is at 1,840-1,850. On the other hand, the support remains at 1,800-1,810, marked by the November-December consolidation, among others, as we can see on the daily chart:

S&P 500 Index: Daily Chart
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Expectations before the opening of today's session are virtually flat, with index futures currently mixed between -0.1% and 0.0%. The European stock market indexes have lost 0.1-0.5% so far, following weaker-than expected economic data release from Germany. Investors will now wait for some U.S. economic data announcements: Empire Manufacturing number at 8:30 a.m., NAHB Housing Market Index at 10:00 a.m. The S&P 500 futures contract (CFD) trades slightly below its recent highs, fluctuating within a rather narrow range. The resistance is at around 1,840, and the nearest support is at 1,825-1,830, as the 15-minute chart shows:

S&P 500 futures contract (CFD): 15-minute Chart
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The technology Nasdaq 100 futures contract (CFD) is in an analogous short-term consolidation, just below its recent highs. The resistance is at around 3,670, and the support is at 3,640-3,650. For now, it looks like a topping consolidation, as the market might retrace some of the recent uptrend:

Nasdaq 100 futures contract (CFD): signs of a topping consolidation
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Thank you.



Paul Rejczak

Author: Paul Rejczak

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts

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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