The recent decline in US stocks is still not over, and most of the London-session rallies are being sold during the US session, pushing the indices lower into the close. Monday’s trading was no exception.

Tuesday is following a similar pattern so far, with US indices rising during the day, but the cash session could bring further selling. At the time of writing, the SP500 index was 0.3% higher, trading at around 4,370 USD, erasing earlier losses.

It looks like there could be a solid support base in the 4,340 USD zone, and as long as the index trades above it, the short-term outlook seems bullish. Another demand zone is at the current swing lows at 4,280 USD. Should the price drop below it, the medium-term downtrend would most likely be confirmed, targeting the 4,000 USD level in the neg lower.

Alternatively, the target for bulls is near 4,400 USD, followed by the bearish trend line at 4,425 USD. There is a significant bullish divergence between the price and the RSI (21) oscillator, possibly helping the bullish case for now. 

The big picture remains bullish for stocks as central banks continue to pump record amounts of money into the financial systems, which is not going to change anytime soon. Therefore, the dip-buying strategy is still preferred among traders and investors. 

SP500 4-hour chart, 3:15 PM CET 

Source: https://www.axiory.com/technical-analysis/sp500-remains-capped-by-a-bearish-trendline

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About Author

Peter comes from a background in corporate finance which began in 2013 when he completed the Corporate Finance Program at the University of Economics in Bratislava. He’s been actively involved in the market sector since 2008 and got his hands-on experience in trading in 2011. His experience in finance and trading continues not only as a market analyst at Axiory Intelligence but also through his studies to obtain a degree in Capital Markets. The study is in line with MIFID II regulations and is under the supervision of the European Regulator ESMA, which strongly emphasizes ethics and morale in investing and working with a client.

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