Reverse Head & Shoulders Setup on SPX, Target at 4700
Overview
The main view of this trade idea is on the Daily Chart.
The S&P 500 Index (SPX) is in the midst of a Reverse Head & Shoulders setup. Once completed, the Index is expected to rally towards 4700. The Left Shoulder is observed around the June 2022 low of 3640. The Head is seen around the Bear Market low on October 14th 2022. That low was 3489. The neckline is observed at the lower highs of in March 29th 2022 and Tuesday 16th August 2022. This view will be negated if SPX were to decline below 3750.
Technical Indicators
The technical indicators corroborate this view. The Index is back above its 125-Daily Simple Moving Average on Wednesday 11th January, 2023. The Awesome Oscillator (AO) is above 0 and green. Also, the Index’s Relative Strength Index (RSI) is above 50.
The intra-day trend following indicators of SPX also show uptrends in the 15-Min, 2-Hr, 4-Hr and Daily timeframes. Short term support is observed around the 3900 price level.
Recommendation
The recommendation will be to go long at market, with a stop loss at 3750 and a target of 4700. This produces a risk/reward ratio of 2.67.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes.
At the time of writing, I have exposure to SPX.
The main view of this trade idea is on the Daily Chart.
The S&P 500 Index (SPX) is in the midst of a Reverse Head & Shoulders setup. Once completed, the Index is expected to rally towards 4700. The Left Shoulder is observed around the June 2022 low of 3640. The Head is seen around the Bear Market low on October 14th 2022. That low was 3489. The neckline is observed at the lower highs of in March 29th 2022 and Tuesday 16th August 2022. This view will be negated if SPX were to decline below 3750.
Technical Indicators
The technical indicators corroborate this view. The Index is back above its 125-Daily Simple Moving Average on Wednesday 11th January, 2023. The Awesome Oscillator (AO) is above 0 and green. Also, the Index’s Relative Strength Index (RSI) is above 50.
Recommendation
The recommendation will be to go long at market, with a stop loss at 3750 and a target of 4700. This produces a risk/reward ratio of 2.67.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes.
At the time of writing, I have exposure to SPX.