sp 500 weekly outlook for 16 feb to 20 feb limited upside potential below 21402170 risk of an interm

What happened last week

The U.S. SP 500 Index (proxy for the S&P 500) has rallied to a record high and almost met the lower limit of our expected target at 2100. Please click on this link for more details on our previous weekly outlook.

Key elements

• Current price action is coming close to the upper limit of the “Expanding Wedge” configuration in place since early December 2014 at 2128 (see daily char).
• The 2128 resistance also confluences with a Fibonacci cluster (see daily & 4 hour charts).
• The upper boundary of the long-term ascending channel (in light blue) in place since 02 October 2011 now stands at 2140/2170 (see daily chart).
• The 2140/2170 long-term resistance also confluences with a Fibonacci projection (see daily chart).
• The intermediate term RSI oscillator is coming close to an “extreme” overbought level which suggests limited upside potential (see daily chart).
• The 2067 and 2025 support corresponds closely with the 23.6% and 61.8% Fibonacci retracement from 02 February 2015 low to its current all-tine high respectively (see 4 hour chart).
• The lower limit of the “Expanding Wedge” stands at 1980 which is also the 200-day Moving Average (see daily chart).

Key levels

Intermediate resistance: 2128

Pivot (key resistance): 2140/2170

Support: 2067 & 2025

Next resistance: 2240

Conclusion

Elements suggest limited upside potential. The U.S. SP 500 Index is likely to see a final push up towards 2128 with a maximum limit set at the 2140/2170 weekly pivotal resistance for an intermediate decline towards 2067. A break below 2067 is likely to reinforce the decline to target the next support at 2025 within the on-going multi-month bullish trend.

On the other hand, a clearance above 2140/2170 may invalidate the intermediate decline scenario to open up scope for a further potential rally towards the next resistance at 2240.

Disclaimer

The information contained in this material is intended for general circulation only.  It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs.  Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.  All queries regarding the contents of this material are to be directed to City Index Asia Pte Ltd.