Are Stock Prices Still Forming a Bottom?

January 4, 2023 (Investorideas.com Newswire) The S&P 500 keeps extending its consolidation – is this a potential bottoming pattern?

The broad stock market index lost 0.40% on Tuesday, after opening above its last Friday’s closing price. It extended an over two-week-long consolidation along the 3,800 level. On previous week’s Thursday it reached new medium-term low of 3,764.49, before bouncing back above 3,800. Overall it kept extending a consolidation following the decline from 4,100 level. In mid-December the S&P 500 has been negatively reacting to the December 14 FOMC interest rate hike, among other factors.

The S&P 500 will likely open 0.3% higher this morning. We may see another attempt at breaking above the recent trading range. The S&P 500 index trades within an over two-week-long consolidation and above the 3,800 level, as we can see on the daily chart:

Futures Contract Bounces Back and Forth

Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday it came back to the resistance level of around 3,900, but then it fell closer to the support level of 3,800 again.

Conclusion

The S&P 500 is expected to open slightly higher on Wednesday. The market will be waiting for the important ISM Manufacturing PMI, JOLTS Job Openings releases at 10:00 a.m. and the FOMC Meeting Minutes release at 2:00 p.m. So it may see more volatility today. There have been no confirmed positive signals so far. However, stocks may be forming a bottom here.

Here’s the breakdown:

The S&P 500 index continues to trade within its short-term consolidation.
There have been no confirmed positive signals so far, however, stocks may be forming a bottom.
In our opinion, the short-term outlook is bullish.

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Thank you.

Paul Rejczak,

Stock Trading Strategist

Sunshine Profits: Effective Investments through Diligence and Care

The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data’s accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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