Over the last 7 years, S&P 500 has respected EMA 200 + long term diagonal support; with very similar touch-points.
There is currently a challenging double top in the 295 area which might push the price down to consolidate between 257-295. The current channel is between 273-295 which if you want to profit, you would want to zoom-in a trade set-up with a lower time-frame.
If consolidation remains, this could be in danger zone as it approaches a very strong support with EMA 200 + long-term trend line which was just tested in December 2018.
Stochastic indicator also tell us good information about the trend confirmation of the movements:
-It remains over the 'Stoch' limits when the rally has been continuous
- Spikes down the limit with aggressive bound representing big support rejection
- Inside limit area: consolidation
A good approach with the stochastic , EMA and trend line would be the following:
- 295 break up + continuous 'stoch' above limit will definitely confirm another rally with 295 as resistance in case a fake break happens
- A break below 273 with 'stoch' inside limit areas might indicate a possible test of the biggest support: around 258 levels touching EMA 200 + trend line .
- Stochastic below the limit on this scenario could mean an aggressive sell-off and will have to see if it bounces on 258 + EMA 200 + trend line which could be a good buy opportunity with low stop loss.
This long-term strategy is currently in a neutral position, we would need to wait for channel confirmation. If you want to trade, you would need to go into a lower time frame.
There is currently a challenging double top in the 295 area which might push the price down to consolidate between 257-295. The current channel is between 273-295 which if you want to profit, you would want to zoom-in a trade set-up with a lower time-frame.
If consolidation remains, this could be in danger zone as it approaches a very strong support with EMA 200 + long-term trend line which was just tested in December 2018.
Stochastic indicator also tell us good information about the trend confirmation of the movements:
-It remains over the 'Stoch' limits when the rally has been continuous
- Spikes down the limit with aggressive bound representing big support rejection
- Inside limit area: consolidation
A good approach with the stochastic , EMA and trend line would be the following:
- 295 break up + continuous 'stoch' above limit will definitely confirm another rally with 295 as resistance in case a fake break happens
- A break below 273 with 'stoch' inside limit areas might indicate a possible test of the biggest support: around 258 levels touching EMA 200 + trend line .
- Stochastic below the limit on this scenario could mean an aggressive sell-off and will have to see if it bounces on 258 + EMA 200 + trend line which could be a good buy opportunity with low stop loss.
This long-term strategy is currently in a neutral position, we would need to wait for channel confirmation. If you want to trade, you would need to go into a lower time frame.