S&P500 - Holding but Vulnerable - Technical Take
By Technical Analyst Colin Abrams
Recommendation: LOOK TO SELL SHORT
Current Trend: Short- and med-term up but overbought. Long-term up.
Strategy: Sell short a close below line 3, or a reversal week down (more conservative).
Chart Setup: The S&P 500 has moved sideways over the past week with no short signal given as yet. It can still edge a bit higher in the very short-term, but one should still be focusing on looking to sell short.
- Its short-term Stochastic has pulled back, without the price pulling back and this is often a bullish scenario.
Strategy Details: Nevertheless, I would not be buying at current levels, regardless of whether it continues up a bit more or not. Sell it short on a close below line 3 (2465) which will be a confirmation of the end of the current rally. Or sell short a reversal week down (which might be a more conservative entry).
Target: The price could still make it up to 2492. But once the short triggers, look for a drop to 2422 to lock in partial profit, and the rest at lines 2 and 1 at 2412.
Stop-loss: A close above the high of the current rally. Then a breaking of its prior two-day high from 2425.
Wishing you profitable trading until next time.
Colin Abrams
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