Stocks remained above their previous low on Friday, and today they are expected to open much lower. Will the downtrend continue?
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The S&P 500 index gained 0.08% and it closed at 4,662.85 on Friday after bouncing from the daily low of 4,614.75. The broad stock market’s gauge remained above its Jan. 10 local low of 4,582.24. It continues to trade within an over two-month long consolidation. Late December – early January consolidation along the 4,800 level was a topping pattern and the index fell to its previous trading range. This morning the market is expected to open 0.9% lower so we may see an attempt at breaking below the 4,600 level.
The nearest important resistance level is at around 4,680-4,700. On the other hand, the support level is at 4,580-4,600, marked by the recent local low. The S&P 500 is still trading within a medium-term consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Nasdaq 100 Bounced From 16,000 Resistance Level
The technology Nasdaq 100 index remains relatively weaker than the broad stock market. On Jan. 10 it fell to the local low of 15,165.53. The Nasdaq 100 was almost 1600 points or 9.5% below the Nov. 22 record high of 16,764.85. Last week it bounced from the 16,000 level and it went closer to the local low again. It still trades along the September’s local high, as we can see on the daily chart:
Apple Extends Its Consolidation
Recently, Apple stock broke below its two-month long upward trend line after reaching the new record high of $182.94. So far, it looks like a downward correction and the nearest important support level is at $165-170, marked by the previous highs and lows. The stock trades within an over month-long consolidation of around $170-180.
Is this a medium-term topping pattern? It’s getting very hard to fundamentally justify the Apple’s current market capitalization of around $3 trillion.
The S&P 500 index is expected to open 0.9% lower this morning following global stock markets’ weakness amid Russia-Ukraine tensions and worse-than-expected economic data releases. So the market will get close to the recent local lows and the support level of around 4,580-4,600 again. There have been no confirmed short-term positive signals so far. However, we may see another intraday rebound later in the day. The quarterly earnings releases remain a bullish factor for stocks.
Here’s the breakdown:
- The S&P 500 will likely get back to the 4,600 level this morning; later we may see another intraday rebound.
- In our opinion no positions are currently justified from the risk/reward point of view.
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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.