S&P 500 – UP­SIDE BREAK­OUT

Trend: Short term up. Medium term side­ways. Long term up.

Finweek English Edition - - COMPANIES & MARKETS -

Strat­egy: Traders buy on a mi­nor pull­back.

The S&P (like the cop­per price) has formed an in­verse head and shoul­ders (as la­belled). The price has bro­ken out above line 1 (the “neck­line”) to con­firm that pat­tern. It’s also bro­ken out back above its 50-day mov­ing av­er­age. More up­side is ex­pected over the short term only.

The daily MACD (on top) is mov­ing above its zero line, which is a bullish sign and tech­ni­cally puts it back into a short-term up­trend.

Traders buy for more short-term up­side. Buy ide­ally on a two-to four-day pull­back – eg, to the 1091 level.

The min­i­mum up­side tar­get is 1082 – ie, the height of the in­verse head and shoul­ders pro­jected up. Traders take prof­its there. Medium-term play­ers to also take prof­its on stocks in gen­eral up there.

Place your ini­tial stop-loss as a clos­ing price be­low 1084 (spot price).

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