S&P 500 Looks to Resume Downward Bias After a Few Days of Consolidation

S&P 500 Price Analysis – March 22

After a few days of consolidation, the market looks to restart to the downside. The S&P500 is now in a selling market as it has fallen from its recent rise to 2500 by more than 20 percent while investor sentiment is weakening. Given major monetary and fiscal stimulus, last week stocks around the world continued to end sharply lower.

Key Levels
Resistance Levels: 3000, 2600, 2332
Support levels: 2250, 2100, 2000

S&P 500 Long term Trend: Bearish

In the last few weeks, the S&P 500 has given up about a third of its value. After a few days of consolidation, the market revert to the downside. The S&P500 is currently on a bear market as it fell from the recent high by more than 20 percent and now trading at 37-month lows.

The drop below the level of 2250 may, in the long run, cause further declines towards the price levels of 2100 and 2000. Price levels of 2400, 2500, and 2600 are likely to serve as resistance going forward.

S&P 500 Short term Trend: Bearish

Technically, the zone at 2500-2600 is a level for the S&P 500 seen as an overshoot on the 4-hour time frame— a level the S&P 500 has already traded below. Hence more reductions in gross exposure by investors could push the liquidity-driven overshoot lower than anticipated.

For investors with a 6-12-month horizon, the 2550-2600 level range may offer an attractive risk-reward buying opportunity on the upside perhaps the market retraces, but the bearish trend remains intact as sentiments worsen.

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