sp 500 weekly outlook for 26 jan to 30 jan push towards expanding wedge top at 2100 above 2023 suppo

What happened last week

The S&P 500 has managed to stage a recovery and hit our first target at 2064 as expected. Please click on this link for more details on our previous outlook.

Key elements

• The upper and lower limits of the long-term ascending channel (in light blue) now stands at 2140/2170 and 1900 respectively (see weekly chart).
• The 2140/2170 resistance zone also confluences closely with multiple Fibonacci projection levels from various degrees (see weekly chart).
• The long-term RSI oscillator continues to display a bearish divergence signal but it is still holding above its support (see weekly chart).
• The 200-day Moving Average is acting as a support at around 1975 (see daily chart).
• Since early December 2015, price actions are now tracing out an impending “Expanding Wedge” pattern with upper and lower limits at 2100 and 1975 respectively (see daily chart).
• The intermediate term RSI oscillator is still holding above its 50% level (see daily chart).
• Since 16 January 2015 low, the Index has evolved within a short-term ascending channel (in orange). Current price action has managed to stage a bounce from its lower boundary (close to the 2023 horizontal support) and the upper boundary now stands at 2070/2078 (see 4 hour chart).
• The Stochastic oscillator has just exited from its oversold region (see 4 hour chart).

Key levels (1 to 3 weeks)

Pivot (key support): 2023

Resistance: 2070/2078 & 2100

Next support: 1975

Conclusion

The weekly pivotal support to watch will be at 2023 for a potential push up towards 2070/2078 before 2100 (upper limit of the “Expanding Wedge”).

However, failure to hold above 2023 may negate the bullish tone for a slide to test the lower limit of the ‘Expanding Wedge” at 1975.

Disclaimer

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