sp 500 weekly outlook for 02 feb to 06 feb back towards expanding wedge support at 19801975 14276201

What happened last week The S&P 500 broke below the 2023 support and drifted down to retest the lower limit of the “Expanding Wedge” configuration […]

What happened last week

The S&P 500 broke below the 2023 support and drifted down to retest the lower limit of the “Expanding Wedge” configuration at 1980/1975. Another week of high volatility! Please click on this link for more details on our previous outlook.

Key elements

Since early December 2014, the Index continues to evolve within an ‘Expanding Wedge” configuration with upper and lower limits at 2100/2126 and 1980/1975 respectively. Current price action is hovering just above the 1980/1975 lower limit (see daily chart).
The 200-day Moving Average is acting as a support at 1980 (see daily chart).
The intermediate term RSI oscillator continues to be supported by its ascending trendline (see daily chart).
The upper limit of the “Expanding Wedge” at 2126 also corresponds with the 1.236 Fibonacci projection from 16 December 2014 low to 16 January 2015 low (see 4 hour chart).
The short-term Stochastic oscillator has dipped into the oversold region (see 4 hour chart).

Key levels (1 to 3 weeks)

Pivot (key support): 1980/1975

Resistance: 2067 & 2100/2126

Next support: 1920/1900

Conclusion

As long as the weekly pivotal support at 1980/1975 holds, the Index is likely to shape a push up towards the 2067 range top joining the highs since 09 January 2015. Only a clear break above 2067 may trigger a further upside movement towards the “Expanding Wedge” range top at 2100/2126.

On the other hand, failure to hold above 1980/1975 may see a deeper decline to test the long-term significant support at 1920/1900 (also the lower boundary of the long-term ascending channel –in light blue).

Disclaimer

The information contained in this material is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index Asia Pte Ltd.

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