Stocks: Should We Expect More Upside?

S&P 500 Technical and Fundamental Analysis

The S&P 500 index gained 0.53% on Friday following its Thursday’s advance of 1.4%. The broad stock market’s gauge extended its short-term uptrend after breaking above the 4,500 level. It gained over 380 points from the Mar. 14 local low of around 4,162. There have been no confirmed negative signals so far. However, we may see another correction and a profit-taking action at some point.

There’s still a lot of uncertainty concerning the ongoing Ukraine conflict, but investors were recently jumping back into stocks despite that geopolitical uncertainty. This morning the index is expected to open virtually flat after an overnight advance followed by its retracement.

The nearest important resistance level is at around 4,550-4,600, marked by the previous local highs. On the other hand, the support level is at 4,400-4,450. The S&P 500 index trades closer to its January-February local highs along the 4,600 level, as we can see on the daily chart (chart by courtesy of stockcharts):

Futures Contract Remains Above the 4,500 Level

Hourly Chart and Trading Strategy

Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading close to the new local high. Potential resistance level is at around 4,585, marked by the previous highs. There have been no confirmed negative signals so far.

We are maintaining our profitable long position from the 4,340 level, as we are still expecting a bullish price action in the near-term. However, to protect our gain, we decided to move the stop-loss (take profit) and price target levels higher. (our premium Stock Trading Alert includes details of our trading position along with the stop-loss and profit target levels) (chart by courtesy of tradingview):

Conclusion

The S&P 500 index will likely open virtually flat this morning. However, the futures contract retraced its overnight advance, so we may see more uncertainty and a potential profit-taking action.

The war In Ukraine remains a negative factor for the markets. The global markets will also be waiting for this Friday’s monthly jobs data release.

Here’s the breakdown:

  • The S&P 500 index extended its uptrend on Friday; this morning the futures contract retreated from its new local high.
  • We are maintaining our profitable long position (opened on Feb. 22 at 4,340), but we moved stop-loss (take profit) and price target levels higher.
  • We are still expecting an advance from the current levels.

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Thank you.

Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care

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The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data’s accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.