Stock prices were little changed on Tuesday – will they resume their uptrend today?
The S&P 500 index lost 0.20% on Tuesday following Friday’s gain of 0.4%. So it remained below the 4,000 level. The daily high was at 4,015.39, and it was the highest since December 14. Recently the broad stock market broke above its three-week-long trading range before retracing more of the mid-December’s decline.
The S&P 500 will likely open 0.3% higher today following volatile pre-market trading action after lower-than-expected Producer Price Index, Retail Sales releases. So the market will see more short-term uncertainty and a consolidation along the 4,000 level. Recently the index retraced most of its December decline, as we can see on the daily chart:
Futures Contract – Still Close to 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it went as high as 4,032, but it came back closer to 4,000 mark again. The resistance level remains at around 4,000-4,050 and on the other hand, the support level is at 3,950, among others.
Conclusion
The S&P 500 index is expected to open slightly higher this morning. Profit-taking may come at some point, however, there have been no confirmed negative signals and the market remains within an uptrend after breaking above the recent trading range.
Here’s the breakdown:
- The S&P 500 index will likely extend a consolidation along the 4,000 level.
- Investors will be waiting for the coming earnings and further economic data releases.
- In my opinion, the short-term outlook is still bullish.
Thank you.
Paul Rejczak,
Stock Trading Strategist