sp 500 potential push up towards key short term resistance at 2164 1831022016

Daily Outlook, Tues 20 September 2016

(Click to enlarge chart)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has traded sideways after a dip close to our predefined intermediate support of 2130 (printed a low of 2135). Please click on this link for a recap on our latest weekly technical/outlook published yesterday, 19 September.

We continue to expect the Index to evolve within a range bound fashion today with slight upside bias as market participants await for the outcome of two major key risk events tomorrow (latest monetary policies from the Bank of Japan & Fed).

Today key U.S. economic data releases/events as follow:

• Housing Starts for Aug @1230GMT (1.194M m/m consensus)

Key elements

• The Index has continued to evolve within a minor impending bullish “Double Bottom” formation in place since the “climatic swing low” of 2108 printed on 12 September 2016 with an ascending trendline now acting as a support at 2130
• The neckline resistance of the aforementioned bullish “Double Bottom” stands at 2164 which also confluences with the pull-back resistance of the former minor swing lows area of 03 August/01 September 2016.
•  The hourly (short-term) Stochastic oscillator has exited from its overbought region and shows potential for further downside before reaching an extreme oversold level. This observation suggests that price action of the Index may see a minor pull-back at this juncture.

Key levels (1 to 3 days)

Intermediate support: 2136

Pivot (key support): 2130

Resistances: 2164, 2194 & 2205

Next support: 2110/100 (medium-term pivotal support)

Conclusion

The Index may see a dip first towards the near-term support at 2136 with a maximum limit set at the 2130 daily short-term pivotal support before a potential push up for a test on the 2164 neckline resistance of the “Double Bottom” Only a break above 2164 is likely to trigger a further potential rally to target the next resistance zone of 2194/2205 (exit potential of the “Double Bottom” & 1.618 Fibonacci projection).

However, failure to hold above the 2130 short-term pivotal support is likely to negate the bullish tone to see a further slide towards the key medium-term pivotal support of 2110/100.

Disclaimer

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