S&P 500, Nasdaq, Dow Technical Forecast: Stock Research Support
S&P 500, Nasdaq and Dow Price Technical Outlook: Weekly Trading Levels
- S&P500Nasdaq & Dow Trade Level Technical Update – Weekly Charts
- SPX500 liquidation approaching key support area near 4309
- Nasdaq vulnerable below 14420 – Initial support 13301
- Dow advance capped by Fibonacci resistance at 35164 – Initial support 33502
Stocks are on the defensive ahead of the weekly close, with the three major U.S. equity indices trading heavily at the start of U.S. trading on Friday. The FOMC’s bellicose rhetoric over the past few days has continued to fuel expectations for higher rates and faster – price discovery is in progress. From a technical perspective, the levels are clear and the threat remains for further losses in the days ahead. These are targets and invalidation levels that matter on the weekly technical price charts of the S&P 500 (SPX500), Nasdaq (NDX) and Dow Jones Industrial Average (US30). Review my last Strategy Webinar for an in-depth analysis of these technical stock setups and lots of more.
S&P 500 – SPX500 Weekly Price Chart
Chart prepared by Michel Boutrostechnical strategist; SPX500 on Tradingview
Technical outlook: In my last S&P500 Technical Perspectives we noted that “the S&P 500 could be vulnerable at the April open after a full 13% rally from yearly lows. While the broader outlook remains constructive, the threat of another test of the lows continues to head into the second quarter. The SPX500 is now down more than 3.6% since the start of the month with a turnaround out of day in yesterday’s index threatening a retreat towards trend support.
Weekly key Support the targets remain unchanged at the confluence of the 2020 parallel and the 61.8% Fibonacci retracement of the progression from the end of February to 4309– looking for a greater reaction there SI achieved. A break below this threshold would be extremely damaging from a technical point of view. Watch the price action around this zone and watch for closes – losses beyond that could fuel an accelerated test of the 4197 support level. Initial rresistance now back to the 52 week moving average near ~4444 supported by the 61.8% retracement of the 2022 range at 4547– a break/close above this level would be needed to mark the resumption of the broader uptrend towards the record close of the week high at 4677.
At the end of the line : The S&P 500 turned away from key technical resistance three weeks ago, with the pullback now seeking a test of longer-term uptrend support. From a trading perspective, look to cut portions of short exposure/lower protective stops on a descending streak in the 4309 area of interest for possible price inflection IF reached. I will post an update to the S&P 500 technical outlook once we have more clarity on the short-term SPX500 technical trading levels. Stay tuned!
S&P 500 Trader Sentiment – SPX500 Price Chart
- A summary of IG Customer Sentiment shows traders are net-short on the S&P 500 – ratio stands at +1.37 (57.74% of traders are long) – generally a low bearishreading
- Long positions are5.97% more than yesterday and 4.33% more than last week
- Short positions are 9.21% less than yesterday and 3.50% more than last week
- We generally take a contrarian view of crowd sentiment, and the fact that traders are net long suggests that US 500 prices may continue to decline. Traders are sharper than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger 500 US contrarian trading bias from a feeling point of view.
Nasdaq 100 Price Chart – Weekly NDX
Chart prepared by Michel Boutrostechnical strategist; NDX on Tradingview
Remarks: in theAt the beginning of the month, we noted that a rally “over 17% brings the Nasdaq recovery back towards the 52-week moving average (~14863) – risk of top exhaustion below 15334. . .” It ended up being the high with a sharp reversal the following week, triggering another drop in the index.
A close below the February 2020 high / 61.8% retracement of the advance from March to 13878/79 would leave the risk of further losses towards the yearly low at 13301 with key stable support at the close of the week 2021 low / 38.2% retracement (12668/947). Weekly resistance at the yearly close of the week low at 14420 with bearish invalidation lowered to the 52-week moving average / the close of the March high week at 14861/65.
At the end of the line : Although the threat remains for further losses here, the technical position is not so clear. That said, from a trading perspective, looking for a possible inflection in price on a stretch towards 13301 for guidance – rallies should be capped at 14420 IF price heads lower on this stretch.
Dow Jones Industrial Average Price Chart – US30 Weekly
Chart prepared by Michel Boutrostechnical strategist; US30 on Tradingview
Remarks: Almost three weeks later and there is nothing to update here on the Dow Jones. The index failed a third attempt to break key resistance at the 61.8% retracement of the yearly range at 35164. Note that the price was unable to mark a weekly close above the 52-week moving average with a contraction range just below. Weekly support is based on 33502 with a larger technical confluence just below at 32021/530. Ultimately, a break higher above 35164 is needed to bring the medium-term focus back towards the yearly close of the week high at 36231.
Conclusion : The Dow is wrapping up for a move here and while the broader uptrend is preserved, the threat remains for a test of slope support closer to 33500 – area of interest for a possible price inflection if reached . From a trading perspective, looking for a bottom in the coming weeks.
For a full analysis of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Jrading Sstrategy
Active Weekly Technical Setups
-Written by Michel BoutrosTechnical Strategist at DailyFX
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