November 14, 2022 (Investorideas.com Newswire) Stock prices extended their advance on Friday, as the S&P 500 index reached the 4,000 level. We may see a profit-taking action, however, bulls are still in charge.
The S&P 500 index gained 0.92% on Friday following its Thursday’s rally of 5.5%. The market remained bullish after the Thursday’s Consumer Price Index release and the broad stock market’s gauge went the highest since September 13. On Friday, the daily high was at 4,001.48.
This morning the S&P 500 index is expected to open 0.3% lower. We may see a profit-taking action at some point. However, there have been no confirmed negative signals so far.
The S&P 500 index broke above its previous local highs last week and it got to the 4,000 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Futures Contract – Short-Term Uncertainty
Let’s take a look at the hourly chart of the S&P 500 futures contract. It went slightly above the 4,000 level on Friday. For now, it looks like a flat correction within an uptrend or a short-term consolidation. The resistance level is at 4,000-4,050, among others.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
The stock market will likely fluctuate following its last week’s Thursday’s-Friday’s huge rally. The S&P 500 index may take a breather, as it got to the 4,000 level last week. We may see some profit-taking action in the day, as the market seems overbought in the short-term. However, there have been no confirmed negative signals so far.
Here’s the breakdown:
The S&P 500 may remain below the 4,000 level for some time, as investors are likely to take short-term profits off the table.
For now, it looks like a consolidation within an uptrend.
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Stock Trading Strategist
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