empty
 
 
07.05.2021 05:18 PM
Bullish breakout in SPX, but longer-term picture remains vulnerable

In our last analysis on SPX we mentioned that a pull back towards 4075 was justified as long as price was trading below 4180. Breaking above 4180 would be a bullish sign that would bring price to 4200. The index broke resistance late yesterday and is now trading at 4234 having broken out of the sideways trading range it was in.

This image is no longer relevant

Green lines - trading range

Red downward sloping line -resistance (broken)

Red lines - Fibonacci extensions

SPX is approaching our next target of 4244. Trend is bullish as long as price is above 4200. What was once resistance is now support. However chasing the bullish trend here is not advised as price has formed a long-term megaphone pattern that if confirmed, we could see a major reversal in prices.

This image is no longer relevant

Blue lines -bearish divergence

Red line -lower megaphone boundary

SPX is making new all time highs. The RSI is not following. The RSI is providing major warning bearish divergence signs. The almost vertical rise in prices after the epidemic plunge, is impressive and very worrying. The megaphone pattern is a bearish pattern and traders need to be cautious if price turns below 4200-4120.

Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback