S&P 500 approaching trendline support
Following the technology-led drop, the S&P 500 is now nearing potential support around 5390. This is where a bullish trend line going back to October comes into play. It will need to hold this trend line on a daily closing basis to keep the bulls lurking for fresh opportunities.
But if the selling continues, then the next possible support area to watch is the highs made in April and May between 5277 to 5350. Below that area, there’s not much support seen until long-term support and the 200-day moving average near the 5,000 zone.
Therefore, the bulls better step up their game near these short-term support levels to prevent a larger drop. The bulls need confirmation that the market has at least made a temporary low, given extent of the decline this week and the fact that the market is not quite at the oversold levels of 20 on the RSI indicator yet.
By Fawad Razaqzada, market analyst at FOREX.com
But if the selling continues, then the next possible support area to watch is the highs made in April and May between 5277 to 5350. Below that area, there’s not much support seen until long-term support and the 200-day moving average near the 5,000 zone.
Therefore, the bulls better step up their game near these short-term support levels to prevent a larger drop. The bulls need confirmation that the market has at least made a temporary low, given extent of the decline this week and the fact that the market is not quite at the oversold levels of 20 on the RSI indicator yet.
By Fawad Razaqzada, market analyst at FOREX.com
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