Are Stock Prices Still Forming a Bottom?
2023.01.04 15:28
The keeps extending its consolidation – is this a potential bottoming pattern?
The broad stock market index lost 0.40% on Tuesday, after opening above its last Friday’s closing price. It extended an over two-week-long consolidation along the 3,800 level. On previous week’s Thursday it reached new medium-term low of 3,764.49, before bouncing back above 3,800. Overall it kept extending a consolidation following the decline from 4,100 level. In mid-December the S&P 500 has been negatively reacting to the December 14 FOMC hike, among other factors.
The S&P 500 will likely open 0.3% higher this morning. We may see another attempt at breaking above the recent trading range. The S&P 500 index trades within an over two-week-long consolidation and above the 3,800 level, as we can see on the daily chart:
Futures Contract Bounces Back and Forth
Let’s take a look at the hourly chart of the contract. Yesterday it came back to the resistance level of around 3,900, but then it fell closer to the support level of 3,800 again.
S&P 500 E-Mini Futures 1-Hour Chart
Conclusion
The S&P 500 is expected to open slightly higher on Wednesday. The market will be waiting for the important, releases at 10:00 a.m. and the release at 2:00 p.m. So it may see more volatility today. There have been no confirmed positive signals so far. However, stocks may be forming a bottom here.
Here’s the breakdown:
- The S&P 500 index continues to trade within its short-term consolidation.
- There have been no confirmed positive signals so far, however, stocks may be forming a bottom.
- In our opinion, the short-term outlook is bullish.
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