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Will Stock Market Uptrend Continue?

Stock-Markets / Stock Markets 2018 Oct 01, 2018 - 06:45 PM GMT

By: Paul_Rejczak

Stock-Markets

Stocks were virtually flat on Friday, as investors continued to hesitate following the recent record-breaking rally. The S&P 500 index remains close to its September the 21st record high, but will it resume its uptrend?

The U.S. stock market indexes were mixed between 0.0% and +0.1% on Friday, as investors sentiment remained basically unchanged following some economic data announcements along with the third quarter's ending. The S&P 500 index has reached the new record high of 2,940.91 more than a week ago on September the 21st. It currently trades 0.9% below that high. The Dow Jones Industrial Average gained 0.1% and the technology Nasdaq Composite gained 0.05% on Friday.


The nearest important level of support of the S&P 500 index remains at 2,900. The support level is also at 2,885-2,890, marked by the recent local lows. On the other hand, the nearest important level of resistance remains at around 2,920-2,930, marked by last week's Monday's daily gap down of 2,923.79-2,927.11. The resistance level is also at 2,940, marked by the record high.

The broad stock market reached the new record high recently, as the S&P 500 index extended its short-term uptrend above the level of 2,900. Will it continue higher despite some short-term technical overbought conditions? The index is at its three-month-long upward trend line following last Wednesday's intraday reversal, as we can see on the daily chart:

Positive Expectations, but Will Uptrend Continue?

The index futures contracts are trading 0.6-0.7% above their Friday's closing prices this morning. So expectations before the opening of today's trading session are positive. The main European stock market indexes have gained 0.2-0.6% so far. Investors will wait for some economic data announcements today: ISM Manufacturing PMI, Construction Spending at 8:30 a.m. The broad stock market will likely take an attempt at extending its medium-term uptrend today. But will it break above the mentioned September's record high? It's hard to say. If it breaks higher, we could see more buying pressure. There have been no confirmed negative signals so far.

The S&P 500 futures contract trades within an intraday consolidation following its overnight advance. The nearest important level of resistance is at around 2,940-2,945, marked by the record high. On the other hand, the support level is at 2,925-2,930, marked by the previous resistance level. The support level is also at 2,905-2,915, among others. The futures contract is at its recent local high, as the 15-minute chart shows:

Nasdaq at New Record High

The technology Nasdaq 100 futures contract follows a similar path, as it trades higher this morning. The tech stocks' gauge broke above the level of 7,700, and it reached the new record high. The nearest important support level is now at 7,650-7,670, marked by the recent resistance level. The support level is also at 7,600-7,620. The Nasdaq futures contract trades above its short-term upward trend line, as we can see on the 15-minute chart:

Big Cap Tech Stocks Closer to Their Resistance Levels

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It reached the new record high at the level of $229.67 on September the 5th, before reversing lower. Then it broke below its month-long upward trend line. The resistance level remains at $225-230. On the other hand, the support level is at $215:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It has reached the new record high at the price of $2,050.50 in the early September. Since then it was retracing its record-breaking rally. The stock broke below the month-long upward trend line but it bounced off its medium-term upward trend line, and now it is above the price of $2,000 again:

Dow Jones Still at the Trend Line

The Dow Jones Industrial Average reached the new all-time high at the level of 26,769.16 recently. Since then it was retracing that advance. It broke below the support of around 26,500 on Wednesday, but it continued to trade above the upward trend line:

The S&P 500 index retraced some of its last week's record-breaking advance recently, as investors reacted to the last week's Wednesday's Fed's interest rate hike. For now, it looks like some relatively flat correction within a medium-term uptrend, because the index continues to trade above its upward trend line.

Concluding, the S&P 500 index will probably open higher today. We may see an attempt at reaching the new record high, because the market trades just 0.9% below its September the 21st high of 2,940.91. There have been no confirmed medium-term negative signals so far.

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Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
SunshineProfits.com

Stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market behavior based on both traditional and innovative methods of technical analysis. Paul has made his name by developing mechanical trading systems. Paul is the author of Sunshine Profits’ premium service for stock traders: Stock Trading Alerts.

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Disclaimer

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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