Heads up, equity traders!
This stock index may be in recovery mode lately, but it could resume the selloff as soon as it tests this area of interest.
Take a look at these levels:
S&P 500 Index: Daily
The S&P 500 index has formed lower highs connected by a falling trend line that’s been holding since the start of the year.
Will the resistance area attract more selling activity again?
Technical indicators are suggesting so!
Stochastic has already reached the overbought region, reflecting exhaustion among bulls. Heading south would indicate that bears are taking advantage, so the index could follow suit.
The 100 SMA recently crossed below the 200 SMA to confirm that the downtrend is more likely to gain traction than to reverse. These moving averages also line up with the trend line to add to its strength as a ceiling.
In addition, the 100 SMA dynamic resistance is right smack in line with the 61.8% Fibonacci retracement level and a former support zone. A shallow pullback could already find enough sellers at the 50% Fib to drag the S&P 500 back down to the swing low.
In any case, better keep tabs on the upcoming NFP release since this might impact overall market sentiment and Fed tightening expectations. Good luck!
