The S&P 500 index bounced at the horizontal support line at around 3800, creating a "hammer" candle, which is a bullish sign for the immediate short term.
Is this a bull trap or can we expect more downside?
The index might keep rising today and retest the 50-day MA (red moving average).
If the price is able to break above it and also above the horizontal support at around 3900, we can expect the rally to continue.
However, we think that the upside potential is very limited at the moment since there are many resistance levels for the price.
If the price gets rejected at the 50-day MA, we can likely expect the price to drop and break below the support at 3800 and retest the next support level at around 3700 and potentially reach the final target at 3600.
The overall trend for the S&P 500 index is still bearish and this potential rally might be just a pause before the continuation to the downside.
The RSI rose slightly to 42, indicating still a bearish trend.
Overall, the index price could fall further in the upcoming days, until it reaches the oversold condition on the RSI.
Is this a bull trap or can we expect more downside?
The index might keep rising today and retest the 50-day MA (red moving average).
If the price is able to break above it and also above the horizontal support at around 3900, we can expect the rally to continue.
However, we think that the upside potential is very limited at the moment since there are many resistance levels for the price.
If the price gets rejected at the 50-day MA, we can likely expect the price to drop and break below the support at 3800 and retest the next support level at around 3700 and potentially reach the final target at 3600.
The overall trend for the S&P 500 index is still bearish and this potential rally might be just a pause before the continuation to the downside.
The RSI rose slightly to 42, indicating still a bearish trend.
Overall, the index price could fall further in the upcoming days, until it reaches the oversold condition on the RSI.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.