Rising wedge on SPY - Melt up? or Next leg down?

204
Immediate Bias (Tomorrow):
Scenario 1 – Bullish Continuation (Low Probability unless there's a macro catalyst):
Breaks above ~$596–$598 cleanly

Retests that zone as support (watch 595.50 intraday)

Then targets:

600 psychological

604–608 upper resistance channel

Possible end-of-month blow-off top: 612–618

Scenario 2 – Pullback / Rejection (More Probable Setup):
Rejected at ~596–597 zone (which aligns with upper wedge resistance)

Breakdown below $590 intraday

Then targets:

587.80 EMA cluster (20/50)

If lost → 576.44 next EMA + demand level

Followed by major support at 565.87 / 563.43

🔥 Week Ahead Trade Plan (May 20–24)
✅ Bullish Possibility:
If NVDA earnings, FOMC minutes, or macro data surprise to the upside

Watch for breakout above the red wedge and hold above 600

Target range: 604 → 612 max upside

🚨 Bearish Scenario:
Wedge breakdown below ~$590

Momentum cracks down to:

587

576 (watch for bounce)

If panic selling → 565–563 (larger time frame buying zone)

Volume divergence and overbought EMAs support a potential cool-off.

📅 Monthly Projection (End of May):
If wedge breaks down → consolidation range between 563 – 587

If wedge breaks out → blow-off rally up to 612–620, but likely to fade quickly

Fed commentary and NVDA earnings on May 22 will be major catalysts

📌 Key Levels
Type Price Notes
Resistance (R3) 612–618 Final upside blow-off zone (channel top)
Resistance (R2) 604 Overhead channel line
Resistance (R1) 595–598 Wedge top + major resistance
Support (S1) 587 EMA cluster + strong local demand
Support (S2) 576 Clean structure + prior breakout
Support (S3) 565–563 Confluence of long-term EMAs + trendline

🎯 Trade Setups
📉 Bearish (Favored if no breakout tomorrow):
Short 595–597 with stop above 600

Targets: 587 → 576

Optional: Add below wedge break (~590)

📈 Bullish (Confirmation-based):
Break + retest of 597–600

Target: 604, then scale out at 612

Avoid front-running long unless you see volume + price close outside wedge

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