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Stock markets bounce. Where next?

Jason Sen

Stocks headed higher into the end of last week after a strong nonfarm payrolls number and the indication of a slower pace for US rate rises. So what’s next?

The E-mini S&P 500 finally beat strong resistance at 2510/20 and minor resistance at 2535/40 as we headed towards strong resistance at 2556/59. We should struggle here but we may only pause. Short positions could be risky. A break higher targets minor resistance at 2571/74. On further gains look for 2582/84 then 2592/94.

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A move below last week’s high at 2540/38 targets 2528/26 and support at 2517/12. Long positions need stops below 2505. There is minor support at 2493/90 but below here we target strong support at 2470/67.

The Nasdaq 100 hits strong resistance at 6470/80. Short positions need stops above 6520. It is entirely possible that this is the high of the bounce in the bear trend. A break higher, however, targets 6550/55. On further gains look for 6582/84 then 6590/94.

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Failure to beat 6470/80 targets 6444/41, then 6425/23, before support at 6410/00. On a move below 6390 look for 6377/74 and 6360.

Dow and DAX

The E-mini Dow Jones meets key resistance at 23600/620. Short positions need stops above 23700. A break higher targets 23870/890.

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Failure to beat key resistance at 23600/620 targets 23510/500 and support at 23400/380. Holding below 23350 adds pressure for 23150/140. Moving below 23100 risks a slide as far as 22900/860.

The DAX 30 runs into first resistance at 10950/11000. But the strong seven-and-a-half-year trendline resistance at 11140/160 is the best selling opportunity with stops above 11240.

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The first support at 10810/800 is minor but below here we target 10780/760, before better support at 10700/690. This is the best chance of a low for the day but long trades are always risky in a bear trend. A break lower again targets 10650/640, then a buying opportunity at 10600/580. Place stops below 10550.

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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