Bearish Flag Pattern Setup on SPX, Target at 4320
Trend Analysis
The main view of this trade idea is on the 2-Hour Chart. The S&P 500 Index (SPX) appears to be in a bearish flag pattern setup. This continuation pattern is seen with the 1st leg of declines from all time highs to a low around 4430. SPX consolidated a bit and now is attempting to break below the 4430 support. Completion of this setup should take SPX towards 4320.
Technical Indicators
SPX is currently trading below its short (50-MA), medium (100-MA) and long (200-MA) fractal moving averages. There have been negative crossovers on the short and medium as well as the medium- and long-term MAs, adding to the bearish nature of the pattern setup. Also, the RSI is trading below 50 and the KST is in a negative zone.
Recommendation
The recommendation will be to go short at market, with a stop loss at 4525 and a target of 4320. This produces a risk/reward ratio of 1.64.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes. Currently I have exposure to SPX.
The main view of this trade idea is on the 2-Hour Chart. The S&P 500 Index (SPX) appears to be in a bearish flag pattern setup. This continuation pattern is seen with the 1st leg of declines from all time highs to a low around 4430. SPX consolidated a bit and now is attempting to break below the 4430 support. Completion of this setup should take SPX towards 4320.
Technical Indicators
SPX is currently trading below its short (50-MA), medium (100-MA) and long (200-MA) fractal moving averages. There have been negative crossovers on the short and medium as well as the medium- and long-term MAs, adding to the bearish nature of the pattern setup. Also, the RSI is trading below 50 and the KST is in a negative zone.
Recommendation
The recommendation will be to go short at market, with a stop loss at 4525 and a target of 4320. This produces a risk/reward ratio of 1.64.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes. Currently I have exposure to SPX.
Comment:
Target Met. Stop Loss should be moved to break even and monitor for change in trend.