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Opinion: Don’t rush to buy stocks just yet



Stocks rallied on Monday, and that had the effect of overcoming some overbought conditions and even creating some buy signals.

However, a look at the SPX chart shows that the downtrend line is still in effect. Friday’s low at 2330 represents support, as do the March lows at 2322. Overhead, there is still a lot or resistance all the way up to 2370 – or even up to the all-time highs at 2400. In short, Monday’s move did not do anything toward upgrading the status of the all-important SPX chart, which is somewhat bearish.

Eventually, the support at 2322 is going to be broken or the downtrend line is going to be broken through on the upside – and the market should gain some directional impetus from that. That breakdown will likely occur soon. It will probably come just after the French elections, which are going to be held Sunday (April 23rd).


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