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Stocks Are Now At a Serious Resistance Level
This is the first time we are seeing the bulls finding good amount of momentum to the upside since the start of this year. In early February, we’ve had a technical signal that had let us know that the strong bullish-move might be in the horizon and definitely the bulls started the March strong. We also talked about how Bulls’ One Last Fight would be coming, and this is it.
So the question is; minor to intermediate term bullishness has attracted the buyers, but will it continue? Stocks are now at a serious resistance level as I will be discussing this level in this post.
SPY is now trading right underneath the downtrend-resistance (dotted blue) and the 61.8% retracement zone, precisely at $199.78 after close today. We have four known resistances colliding at this level along with your daily oscillators getting near the “overbought” status (not shown in the chart)
- Downtrend resistance (blue dotted)
- Fibonacci 61.8% Retracement (red circle)
- Horizontal pivot (red box):
- Price level of $200: Even/psycological number everyone is watching
The best and the quickest way for the bulls to remedy this situation is, have a gap-up above this resistance (and stay up) in the next few days (what i call “jumping over the fence“) to avoid the ‘shenanigan‘ activities at this resistance level. Regardless of the gap-up or not, well-above $200 is the level for the buyers to reclaim and stay above for at least a week or so for the market to stay in bullish sentiment. If the bulls can do this, $207-$210 might be doable.
However, if the bulls get rejected at this resistance level, sellers will gain confidence, and the fear will return to the market. If that’s the case, next support levels are $194-$192 and then $185-$180. This level could potentially/easily determine the outcome for the rest of this year.