By Dominic Picarda.
The ride is well and truly back on in equities. I see every chance that it will continue for now. Seasonality is soon turning positive for the indices, while there is plenty of healthy scepticism in the air. These make for fertile conditions for an ongoing rally. The recent dip has got rid of daily and weekly overboughtness, which is also helpful to the bulls’ cause. I would be looking to buy further dips today and next week therefore.
S&P 500
Yesterday: “My sights are set on a fresh peak at 1755.7.” The S&P surged strongly, having triggered my buying level by bouncing back through the 21-hourly EMA. I reiterate my target and would seek further long entries, once the index retreats from its currently overbought levels.
Support: 1723.7 – Resistance: 1797.2
Support: 1695.6 – Resistance: 1782.1
Support: 1687.2 – Resistance: 1767.1
Support: 1669.8 – Resistance: 1740.7
DAY: Take profits now and re-enter on a bounce off the 13-fourhourly EMA.
POSITION: I’d buy a further bounce from the 13-fourhourly EMA in due course.
Dominic Picarda CFA, CMT writes the Trader column at http://www.investorschronicle.co.uk/comment/the-trader