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S&P 500 Finds Support; Record Highs In Sight?

By Matthew WellerStock MarketsJun 23, 2021 12:20AM ET
www.investing.com/analysis/sp-500-finds-support-record-highs-in-sight-200587702
S&P 500 Finds Support; Record Highs In Sight?
By Matthew Weller   |  Jun 23, 2021 12:20AM ET
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This week’s bloodbath in the crypto markets is garnering all the headlines, but Tuesday’s big bullish reversal in global stock indices is the more important development for most traders and investors.

Following a period of low volatility, markets were spooked by hotter-than-expected inflation figures and last week’s big hawkish shift from the Fed, leading to the S&P 500’s worst week since February. The rubber band snapped back on Tuesday, with the index seeing a sharp 1.4% rally off support from the 50-day exponential moving average and the bottom of the well-established bullish channel.

With major US indices in a seasonal “quiet period” between earnings seasons and the Fed on hold, traders are likely to take their cues from technical developments, at least until next Friday’s Nonfarm Payrolls report, and from a purely technical perspective, the bias for the S&P 500 remains bullish. After two months of consolidating near record highs, yesterday’s price action created a “Bullish Marubozu” candle, signaling strong buying pressure throughout the day:

SPX Daily
SPX Daily

Source: StoneX, TradingView

Considering the strong support from the 50-day EMA and rising channel, as well as a consistent floor at 40 in the RSI indicator, bullish traders could consider buy trades near current levels with stop losses below support in the 4150 area and a target somewhere in record high territory around 4300+.

This general technique, where you limit your downside risk while trading in the same direction of the established trend, can help put the odds in your favor over the long run, though any individual trade can always still fail.

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S&P 500 Finds Support; Record Highs In Sight?
 

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S&P 500 Finds Support; Record Highs In Sight?

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Comments (1)
Kevin Avila
Kevin Avila Jun 23, 2021 12:21AM ET
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Lol Probably… Why not! nothing makes sense.
Ali Sher
Ali Sher Jun 23, 2021 12:21AM ET
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is it going up❓
Joel Schwartz
Joel Schwartz Jun 23, 2021 12:21AM ET
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Ali Sher No, the value of all of the world’s currencies is going down.
 
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