2016-10-21 15:12:11

Review and dynamics
Since the beginning of trades today, the index S&P500 index has dropped by 0.25% to 2135.0, and the decline continues at the beginning of the European session. Expectations of the rate hike in the US are increasing, which puts additional pressure on the U.S. indices.

According to CME Group, futures market estimates a chance of the key interest rate hike in December at 74%. The index S&P500 has approached support level of 2120.0 (ЕМА200 on the daily chart).

Our opinion
On 4- hour, daily, weekly charts the indicators OsMA and Stochastic give signals to sell. The price may reach support level of 2120.0. If this level is broken down the index may go to the next support level of 2102.0 (ЕМА200 on the daily chart and Fibonacci 23.6% after the rise since February 2016 at the level of 1828.0).

Meanwhile, the index S&P500 remains in the ascending channel on the daily chart. The lower limit of this channel goes between the levels 2120.0 and 2102.0. In this zone, the index will encounter strong support, and will probably rebound. Uptrend in the index S&P500 will continue until it maintains positions above support level of 2102.0.

In the case of the rebound from the levels of 2120.0 and 2102.0 the index will go up to the upper limit of the channel near the level of 2185.0. Upward trend may resume at this time, or even much earlier, in case of the breakout of the nearest resistance level of 2149.0 (ЕМА50 ЕМА200 on the daily and 4-hour charts).

Long positions are preferable despite the rise in the USD.

After break out of support level of 2102.0 the nearest targets will become the levels of 2070.0 and 2050.0 (Fibonacci 38.2% and ЕМА200, ЕМА144 on the weekly chart). Further decline is unlikely. When the index approaches support level of 2120.0, the price may rebound.

Critical level for the bullish trend is support level of 2050.0. Breakdown of support level of 2007.0 (Fibonacci 50.0%) may change the bullish trend.

Support levels: 2120.0, 2115.0, 2102.0, 2070.0, 2050.0, 2030.0 and 2007.0.
Resistance levels: 2149.0, 2165.0 and 2192.0.

Trading tips
Sell Stop: 2128.0. Stop-Loss: 2140.0. Targets: 2120.0, 2115.0, 2102.0, 2070.0, 2050.0, 2030.0 and 2007.0.
Buy Stop: 2142.0. Stop-Loss: 2130.0. Targets: 2149.0, 2165.0 and 2192.0.

Uptrend will continue until the price reaches the level of 2102.0
Uptrend will continue until the price reaches the level of 2102.0

Indicators give short-term sell signals
Indicators give short-term sell signals