Technical Analysis – S&P rally stalls near all-time highs
January 15, 2014 9:40 am
The S&P 500 rally has currently stalled near the all-time highs hit on January 2nd when it reached 1845.75.
The market is now at an important point as the S&P consolidates at these all-time highs and it would be interesting to see if it will be able to sustain these gains to push above the 1845 level. Key resistance is definitely found at 1850 but once prices break above this level, a move higher will be accelerated to the 2000 level.
Based on technical studies, the trend is bullish, as prices are above the 20, 50 and 100-day moving averages, and all three are rising. The market is above the trend line that rises from Oct 2013.
However, the RSI has declined, currently at 59 while the ADX indicates the uptrend has weakened, currently at 24.
Some weakness in the upward momentum can be expected in the short term. A downward correction should lead to support at 1810 (Jan 13 low) followed by 1755 (Dec 16 low and trend line support).
Fundamentally, the S&P is supported by bullish sentiment in the US economy, especially after the solid US retail sales data on Tuesday.
The S&P 500 rally has currently stalled near the all-time highs hit on January 2nd when it reached 1845.75.
The market is now at an important point as the S&P consolidates at these all-time highs and it would be interesting to see if it will be able to sustain these gains to push above the 1845 level. Key resistance is definitely found at 1850 but once prices break above this level, a move higher will be accelerated to the 2000 level.
Based on technical studies, the trend is bullish, as prices are above the 20, 50 and 100-day moving averages, and all three are rising.
The market is above the trend line that rises from Oct 2013.
However, the RSI has declined, currently at 59 while the ADX indicates the uptrend has weakened, currently at 24.
Some weakness in the upward momentum can be expected in the short term. A downward correction should lead to support at 1810 (Jan 13 low) followed by 1755 (Dec 16 low and trend line support).
Fundamentally, the S&P is supported by bullish sentiment in the US economy, especially after the solid US retail sales data on Tuesday.
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