Trade of the week – SPX upside correction is losing momentum
Our trade of the week is SPX
We can see on the monthly SPX chart that the instrument is still within a long-term uptrend channel. It is testing the strong resistance 2900 level where the half-line of the channel is. This level should be broken for the upside correction continuation. Still, we don’t have it and we are inclined to expect a pullback lower.
On a daily chart, we can see that the instrument is close to the 61.8% Fibonacci retracement with negative divergence on RSI (12) emerging. Based on this you can place a short trade entry here with a stop loss above the 2920 level and targeting 2730 level at least, or you can go short upon a break below 2730 level medium-term. Our trading system is indicating a potential of 200-500 and more points of profit.
SPX is losing the upside correction momentum
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
