Technical Analysis SP500 : 2020-02-25


Strong Sell
Strong SellSellNeutralBuyStrong Buy

Below 3235

Sell Stop

Above 3400

Stop Loss

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RSI Sell
MACD Neutral
MA(200) Neutral
MA(50) Sell
Fractals Sell
Parabolic SAR Sell
Bollinger Bands Sell

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe, SP500: D1 broke down an uptrend support line and a 50-day moving average line. Now it is going down from its historical maximum. A range of technical analysis indicators formed signals for a further decrease. We do not exclude a bearish movement if the SP500 falls below the lower Bollinger line: 3235. This level can be used as an entry point. The initial limitation of the risk is possible below the last upper fractal, historical maximum and the Parabolic signal: 3400. After opening a pending order, we move the stop loss following the Bollinger and Parabolic signals to the next fractal maximum. Thus, we change the potential profit / loss ratio in our favor. After the transaction, the more risk-averse traders can switch to a four-hour chart and set a stop loss, moving it according to the trend. If the price overcomes the stop level (3400) without activating the order (3235), we recommend to close the position: the market sustains internal changes that were not taken into account.

Fundamental Analysis

The coronavirus epidemic is spreading outside of China. Will the US S&P 500 stock index quotations fall down?

As of February 24, 77.3 thousand people have been infected in China, 2.6 thousand people died. Iran is in second place by number of deaths (12 people). At the same time, the number of patients in Iran is relatively low and amounts 47. In South Korea there are more than 800 patients, 8 people died. In Italy, more than 200 infected and 7 dead. China produces a significant amount of component parts for US companies. Investors fear supply cuts due to the coronavirus epidemic and its subsequent quarantine. In addition, the demand for American goods has decreased markedly. Particularly, smartphone sales decreased by about a third. The China Passenger Car Association reported a 92% drop in car sales in the first 2 weeks of February to 811 units a day.

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