USSPX500: Recovery attempts to regain medium term bullish channel while upside resistance under all-time-high is tested
The daily candle chart below shows the medium term price history of the USSPX500 contract for difference (CFD). The USSPX500 CFD aims to track the underlying S&P500 Index, and is trading near 2126.6 around time of publication this Tuesday.
Last time USSPX500 was reviewed in Ideas You Can Trade was at the beginning of July when the medium term bullish channel was lost, and the trend was described as "less-bullish," and a downside support target of 2040.0 was mentioned.
Since then a lower-low was reached on 2040.0 where support was establish before a gradual recovery recently picked up speed and lifted the index towards current levels. Following yesterday's intra-day all-time-high in the underlying index, USSPX500 appears at a crossroads - facing upside resistance near 2130 and the support line of the bullish channel - which was just barely regained.
If the support line of the channel holds - and a push above 2130 follows - the bullish momentum should accelerate towards 2155.0. Meanwhile, if these two barriers aren't overcome then a brief pullback towards 2061.0 could precede another push-higher.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 2136.0 with a Limit to take profit @ 2147.0 and a stop-loss @ 2125.0 Risk/Reward Summary: Limit risk = +11.0 points profit / (-11.0) Stop-loss risk = Gain to Loss ratio = 1.00
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 2119.0 with a Limit to take profit @ 2110.0 and a stop-loss @ 2128.0 Risk/Reward Summary: Limit risk = +9.0 points profit / (-9.0) Stop-loss risk = Gain to Loss Ratio = 1.00
Short term daily candle chart zoomed-in:
Short term daily candle chart: