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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.

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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.

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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.

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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).

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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.

Jason Sen

Technical Analyst & Trader

For more information and trading education visit Intertrader

The content of this article is the personal opinion of the author and not Intertrader. You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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