- June 27, 2022
- Posted by: Tradingshot Articles
- Category: Stock Indices
As with the other stock indices, we have certain type of patterns for S&P500 that help us identify medium/ long-term trends and take low risk/ high return positions on the market. In this case, it has been the Channel Down on the 1D time-frame since the January 04 All Time High that has given us both the previous Lower High and Lower Low:
As you see last week’s rise was accurately identified and even though we haven’t reached the 1D MA50 (blue trend-line) yet, you may start considering taking full or partial profits as during the last Lower Low rally, the initial rebound was fake and the price was rejected before the 1D MA50 and the 0.382 Fibonacci level back for a Double Bottom to confirm the buying accumulation.
A similar scenario can therefore take the index back near 3640 and then rebound towards the Lower Highs (top) trend-line of the Channel Down. A viable strategy would be to take at least some profits now and then either buy on the pull-back or if a 1D candle closes above the 1D MA50 first.
Planning a little ahead of this, a closing above the Lower Highs of the Channel Down sets target on the 1D MA200 (orange trend-line), while a weekly one below the 1 MA200 (red trend-line) should target the 1W MA300 (yellow trend-line, scroll chart lower).