The SP500 Index H1 – Possible upward pressure under way
The SP500 Index, on the H1 chart, was in a downward path until the 9th of May when a lower bottom was recorded at 2833.8. Demand overwhelmed supply and the downward momentum was interrupted.
A closer look revealed that the Momentum Oscillator displayed positive hidden divergence between point a and b compared to the price at 2896.0 and 2886.8. This could have alerted technical traders to a possible direction change that might be starting in the SP500.
After the bottom at 2833.8, the market broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator breaking the zero baseline, both further strengthening the possible technical reversal in progress.
A possible critical resistance level formed when the higher top was recorded at 2886.8 on the 10th of May. Sellers then tried to pull the market lower but demand overcome supply and a higher bottom was registered at 2850.1 on the same day.
The possible reversal might be strengthened even further by the crossing of the 15 and 34 Simple Moving Averages, called a Golden Cross, that is currently in progress.
If the SP500 Index breaks through the critical resistance level at 2886.8 then three possible price targets may be projected from there. Attaching the Fibonacci tool to the top of the possible reversal at 2886.8 and dragging it to the bottom of the pullback at 2850.1, the following targets may be calculated. The first target can be anticipated at 2909.5 (161 %). The second price target can be predicted at 2946.1 (261.8%) and the third and final target may be expected at 3005.5 (423.6%).
If the bottom at 2850.1 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the SP500 currency pair on the H1 time-frame will remain bullish.
A closer look revealed that the Momentum Oscillator displayed positive hidden divergence between point a and b compared to the price at 2896.0 and 2886.8. This could have alerted technical traders to a possible direction change that might be starting in the SP500.
After the bottom at 2833.8, the market broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator breaking the zero baseline, both further strengthening the possible technical reversal in progress.
A possible critical resistance level formed when the higher top was recorded at 2886.8 on the 10th of May. Sellers then tried to pull the market lower but demand overcome supply and a higher bottom was registered at 2850.1 on the same day.
The possible reversal might be strengthened even further by the crossing of the 15 and 34 Simple Moving Averages, called a Golden Cross, that is currently in progress.
If the SP500 Index breaks through the critical resistance level at 2886.8 then three possible price targets may be projected from there. Attaching the Fibonacci tool to the top of the possible reversal at 2886.8 and dragging it to the bottom of the pullback at 2850.1, the following targets may be calculated. The first target can be anticipated at 2909.5 (161 %). The second price target can be predicted at 2946.1 (261.8%) and the third and final target may be expected at 3005.5 (423.6%).
If the bottom at 2850.1 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the SP500 currency pair on the H1 time-frame will remain bullish.
Trade closed: stop reached:
This trade was engaged and then stopped out.