Emini Futures Trading Analysis- 28Apr2017

spx-weekly-chart-28apr2017

Trend: The S&P500 index futures are currently bullish, but with a clear resistance at 2400 level, which is just 20 points above the current 2080 level. The weekly chart is pointing to higher prices in the coming months, though we may see some correction in the near term due to the sharp run up in the last few days. The futures appear overbought, but may continue to become more overbought before reversing. Traders should look for some price weakness before taking any bearish positions.

Levels: There is a good buying support at 2330 level. The futures will remain bullish as long as they are trading above 2300 level. Upside targets of 2400 were visible to us even when futures were at 2330 level. The futures are currently in uptrend, but now we are close to the ceiling/upper limit. There is a strong resistance at 2400 level. This 2400 level was our target when futures were down at 2330, and there will be selling pressure near 2400 level. The futures need to close above 2410 for the next leg of upmove. The futures will face increased selling pressure below 2380 and 2360 level can be tested again. From 2380 level, there is a 50-50 chance of going down to 2350 or going above 2400. Therefore, we can only do optional/tactical trades till we get clarity on the direction. The big target of 2500 is intact for this year, so we will go long at suitable times.

Bonus Trades:
(a) Traders can take long positions above 2410 for Target 2440 with 2390 as Stop loss. This trade would offer 30 points gain with 20 points risk.
(b) Traders can take short positions below 2300 for Target 2250 with 2320 as Stop loss. This trade would offer 50 points gain with 20 points risk.

Technical Indicators Analysis:
CCI (94.08) is in neutral territory. A signal is generated only when the CCI crosses above or below the neutral center region. CCI often misses the early part of a new move because of the large amount of time spent out of the market in the neutral region. Initiating signals when CCI crosses zero, rather than waiting for CCI to cross out of the neutral region can often help overcome this. Given this interpretation, CCI (94.08) is currently long. The current long position position will be reversed when the CCI crosses below zero.

RSI is in neutral territory. (RSI is at 65.80). This indicator issues buy signals when the RSI line dips below the bottom line into the oversold zone; a sell signal is generated when the RSI rises above the top line into the overbought zone. RSI is somewhat overbought (RSI is at 65.80). However, this by itself isn’t a strong enough indication to signal a trade. Traders need to look for additional evidence before getting too bearish here.

MACD is in bearish territory, but has not issued a signal here. MACD generates a signal when the FastMA crosses above or below the SlowMA. The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is UP. MACD is in bearish territory. However, the recent upturn in the MacdMA may indicate a short term rally within the next few bars.

Disclaimer: The above analysis is meant solely as a training tool for the understanding of technical analysis of the S&P500 Emini Futures. It is not designed to provide any investment advice.

Leave a Reply

Your email address will not be published. Required fields are marked *