The following comments appeared in last week's post on the daily bar chart pattern of S&P 500: "A continuation of the correction from the Apr 20 top of 2111 is likely. More ominous for bulls is the formation of a 'head and shoulders' reversal pattern with a 'neckline' at 2040. A breach of the 'neckline' may lead to a correction down to 1970."
The importance of the 2040 level for bulls is clearly visible. On Tue. May 17, the index received support from the 2040 level. The next day, the index dropped below 2040 intra-day, but closed above it. On Thu. May 19, the index dropped all the way to its 200 day EMA, but bounced up to close exactly at 2040.
The 2040 level wasn't breached technically because the index did not close below that level - keeping bullish hopes alive. On the last day of the week, the index faced resistance from its 20 day EMA, but closed above its 50 day EMA with a token weekly gain of about 6 points.
-- The importance of the 2040 level for bulls is clearly visible. On Tue. May 17, the index received support from the 2040 level. The next day, the index dropped below 2040 intra-day, but closed above it. On Thu. May 19, the index dropped all the way to its 200 day EMA, but bounced up to close exactly at 2040.
The 2040 level wasn't breached technically because the index did not close below that level - keeping bullish hopes alive. On the last day of the week, the index faced resistance from its 20 day EMA, but closed above its 50 day EMA with a token weekly gain of about 6 points.
Read more at:
http://investmentsfordummieslikeme.blogspot.in/2016/05/stock-index-chart-patterns-s-500-and_23.html
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