S&P 500 trade idea

The US 500 Cash (S&P 500) has broken out of the downtrend drawn from the December and all-time high, although seems to running into supply between 2,068 and 2,072.

S&P 500
Source: Bloomberg

I would keep position sizing small until the index can break above 2,072 and then would think about adding to the trade.

From here a move to the all-time high of 2,092 would be my first clear target (based on the break) and I feel it would make sense adding to long positions again if the index can print a new high, as the market could feasibly go on to test 2,116 (the trend resistance drawn from the April 2011 high).

If we look at stochastic momentum, we can see the bulls are in control and momentum is moving higher. The RSI is also moving nicely above 50, so this could suggest a test of 2,092 is on the cards.

Fundamentally, there is a growing bearish case but from a purely technical view I feel traders could look at long US 500 Cash trades and cut back on positions on a break of 2,042 and 2,025.

US 500 Cash
Click to enlarge

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.