US tech stocks break higher
The E-mini S&P 500 has been on an incredible run from the December 2018 low of 2317. A 30% gain in just seven months has seen the index climb to an all-time high at 3023 this month. This at a time when many market observers and investors have been worried about stocks being overvalued.
Last week’s small correction has been recovered this week, to re-test the all-time high at 3023. Now we face key trendline resistance at 3030/3040, so this is the most important level going forward. Bulls need at least a weekly close above here tomorrow night to generate another buy signal. A monthly close above this resistance next week would help to confirm a new leg higher has started in the record bull trend.
In the short term we have first support at 2999/97. Long positions need stops below 2994 for 2991/90 and second support at 2983/81. A break below 2978, however, targets 2975, 2969/67 and 2964/62 before a buying opportunity at 2960/55.
If the Nasdaq 100 offers any reliable indication of the future direction of the S&P 500, then US stock markets are likely to head higher. The tech index has comfortably beaten not only nine-month trendline resistance at 7950 but also last week’s high at 8001 (from where the index dramatically sold off almost 200 points).
Holding above the previous all-time high at 8000/8002, set last week, is an obvious buy signal in the longer-term bull trend. A break above yesterday’s new all-time high at 8051.75 would target 8081/85 and 8105/10. Above 8120 look for 8170/80.
We can expect good support at 8002/8000 into the end of the week after yesterday’s break higher. Long positions need stops below 7985. A break lower risks a slide to 7940/30 today, however. Try long positions with stops below 7910.
Technical Analyst & Trader
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