The S&P 500 has been enjoying a nice uptrend for the last six months, with small healthy pullbacks.
There are various ways for us to monitor trend, I recently wrote on my blog about simple trend lines and support levels – discussing that technical analysis doesn’t have to be difficult.
ANDREWS PITCHFORK
A great tool for monitoring support and resistance in a trending market is Andrews’ Pitchfork. This tool looks at the channel of a trend, built around three price points that create the ‘pitchfork.’
CHART ACTION
We first came in contact with one of the Pitchfork support levels at the end of last year before the market blasted higher to ring in the New Year. On April 11th we saw the market pause as the S&P 500 corrected over 55 points before continuing its advance. We are now at this channel line again after the equity market finally broke the 1600 level.
CAN THE BULLS BREAK RESISTANCE?
Being a trend channel, the S&P needs to break this resistance for buyers to keep the party going. If anything can be said about the bulls, it’s that they sure have stamina – in the wake of falling momentum the equity market has powered higher.
We’ll see if they can keep the rally alive and put the bearish resistance behind them.
Disclaimer: The information contained in this article should not be construed as investment advice, research, or an offer to buy or sell securities. Everything written here is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned.