Trade Alert: Buy This Dip On The S&P 500

by / / Trade Ideas

On the back of comments from the US Federal Reserve Chair Jerome Powell stating that the further interest rate hikes are on the cards as the result of the strong US economy, US markets have continued to tick lower.

The S&P 500 is down from 2780 on Tuesday 27-February, having found resistance at the 61.8% Fibonacci retracement level.

Looking at the daily chart, we shave seen a rising wedge pattern emerge, where the price has given a bearish break out of the wedge. My previous experience with this pattern informs me that the breakdown is often accompanied by a re-test (bullish leg).

I am looking at an opportunity for traders use this dip to take a short term buy/long position on the S&P 500 index.

Chart: S&P 500 Cash Index

Trade Levels:

Buy at current levels 2663/65
Stop-loss: 2649
Take Profit: 2760/2780

Lester Davids

Lester Davids

Trading Desk Analyst at Unum Capital
Lester started his career as an intern in the Group Schemes Risk Management department of Old Mutual in 2006 after having attained his National Diploma in Internal Auditing from the Cape Peninsula University of Technology. After a year and four months of service he took up the opportunity offered by Deloitte's Risk Advisory Services for a three-year contract as a Trainee Internal Auditor.

Whilst searching for employment after his had contract expired, he made the decision to document his ideas for his personal passion which was financial markets with a view to build a public profile and record of all work.

His passion for investment and market-related content dates back to his love for reading having started to notice the financial market data alongside the sports pages as a university student in 2004.

Lester is Trading Desk Analyst and has been with Unum Capital since July 2016.
Lester Davids