Broad Stock Market At New Highs: Investors Take Some Profits, Flat Correction Or Topping Pattern?

May 29, 2014

Briefly: In our opinion speculative long positions are still favored (with stop-loss at 1,885, S&P 500 index).

Our intraday outlook is still bullish, and our short-term outlook is now bullish, following a breakout above consolidation:

Intraday (next 24 hours) outlook: bullish

Short-term (next 1-2 weeks) outlook: bullish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

The U.S. stock market indexes lost 0.1-0.3% yesterday, retracing some of their recent rally, as investors took profits. However, the S&P 500 index has managed to reach yet another new record high at 1,914.46. The nearest important support level is at around 1,880-1,900, marked by previous resistance. There have been no confirmed negative signals so far, as we can see on the daily chart:

Expectations before the opening of today’s session are virtually flat, with index futures currently up 0.1%. The main European stock market indexes have been mixed between -0.2% and +0.2% so far. Investors will now wait for some economic data announcements: Initial Claims, GDP Second Estimate at 8:30 a.m., Pending Home Sales at 10:00 a.m. The S&P 500 futures contract (CFD)  is in a relatively narrow intraday trading range, following yesterday’s quite volatile trade. The nearest important resistance is at 1,910-1,915, and the nearest level of support is at 1,900-1,905. For now, it looks like a flat correction within an uptrend:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates within  a relatively narrow trading range. The resistance is at around 3,730, and the nearest important support remains at 3,700-3,710, marked by previous resistance, as the 15-minute chart shows:

Concluding, the broad stock market is in an uptrend, however, we can see some short-term uncertainty following recent rally. Nevertheless, we continue to maintain our already profitable long position, with stop-loss at 1,885 (S&P 500 index). In other words, we will try to let the profit run.

Thank you.

Paul Rejczak

Stock Trading Strategist

Stock Trading Alerts

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All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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