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Technical trade note on S&P500 - 17 August 2018


The U.S markets have rebounded significantly from the recent sell off we saw internationally on Wednesday. Yesterday we saw dip buyers enter the market as expected driving the market higher into the close supported by the news that the trade war tensions are easing between the U.S and China.

Below you will find my technical outlook and trade notes with charts.

Technical outlook

The S&P 500 has been trading in an ascending channel and sold off quite significantly from the top of the channel. If we look at the possible setup unfolding on the S&P 500 there might be a head and shoulders (H&S) forming which can signal that the price might move lower back to the 2789 price level.

Screen Shot 2018-08-17 at 10.21.53

Source: Bloomberg

If we see the Bulls remain in control, then we can expect the price action to move higher, with a break above 2852 (above right shoulder) negating the head and shoulders pattern playing out. I will be looking to long (buy) the S&P 500 from 2852.

Take note that I will be taking on a bit more risk in widening my stop just for in case we might get a move higher as seen in the chart.

Trade: S&P 500

  • Entry Buy: 2852
  • Stop loss: 2817
  • Target price: 2878

Screen Shot 2018-08-17 at 10.22.50

Source: Bloomberg

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