SPX500 Close To Major Resistance Around 3400

13 August 2020

SPX500 has reached dangerously close to 3400 and might be threatening to break higher. Believe it or not, if in that case, the upside remains shallow and indice is expected to come under pressure. The structure is bearish until 3400 levels hold.

SPX500 probable wave counts are as follows: The indice had earlier dropped from 3400 through 2200 levels, sub-dividing into 5 waves. The impulse drop has been labelled as larger degree Wave (1) on the chart here.

Ideally, an impulse is followed by a corrective wave and the rally from 2200 through 3388 could be the counter trend rally. It looks to be in 3 waves until now and managed to reach extremely close to 3400 mark. Also note that SPX500 has crossed above the fibonacci 0.88 retracement and probability remains to print marginally above 3400.

As a typical property of Wave (2), it could rally close to the Wave (1) top (here 3400) giving a sense of breaking it. But unless it breaks, the structure remains valid and a sharp reversal can be expected. In this case, Wave (2) has reached 3388 until now, and till 3400 remains intact, the structure is looking bearish.

SPX500 immediate support is seen towards 3320 levels, while resistance is intact around 3400 levels respectively. A break below 3300 would be the first sign of the beginning of bearish reversal. Traders might remain inclined to hold short positions, with a protective stop above 3400 and projected targets below 2700, going forward.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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