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CFD: Ideas You Can Trade - USSPX500 - Regains Channel, Still Faces Resistance

Posted by Steven Hatzakis on Jun 10, 2015 2:53:00 PM

USSPX500: Bullish channel regained yet short term resistance near today's high still obstacle to breakout or reversal 

The daily candle chart below shows the medium term price history of the USSPX500 contract for difference (CFD) which is trading near 2105.1 around time of publication and near session high's today and less than an hour away from the market close.

This CFD aims to track the S&P500 Index which was last reviewed in Ideas You Can Trade earlier last week when the lower support line of the medium term bullish channel (point 4 in blue on chart below) was being tested. Conditions were described as ripe for the trend to change, and it subsequently did - although was regained today.

A lower-low followed after support on that lower line failed, and a bounce from just over 2060.0 brought the Index back towards current levels. 

Today the bullish channel was regained yet prices are still trading under the short term bearish resistance line (see red line on chart) that coincided over today's high. 

If this resistance line is overcome a bullish continuation should follow, whereas a failure to break-above this line would bring USSPX500 down to test the support line of the bullish channel - which if lost again - could spark a stronger sell-off. 

Below are examples of how to trade a bullish continuation or a bearish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 2110.0 with a Limit to take profit @ 2120.0 and a stop-loss @ 2101.0 Risk/Reward Summary: Limit risk = +10.0 points profit / (-9.0) Stop-loss risk = Gain to Loss ratio = 1.11 

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 2094.0 with a Limit to take profit @ 2070.0 and a stop-loss @ 2110.0 Risk/Reward Summary: Limit risk = +24.0 points profit / (-16.0) Stop-loss risk = Gain to Loss Ratio =  1.50

Short term daily candle chart:

USSPX500Daily june 10th 2015 note

Topics: US Stock Market, S&P futures, SPX, $SPY, contract for difference, USSPX500, technical analysis, cfd, Forex, Ideas You Can Trade, Wall Street, Standard & Poors, S&P500 index, SP500


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