By: Scott Redler
Over this weekend, Patti Domm and I spoke about the developing wedge in the S&P:
Getting Technical
Scott Redler, who follows the market’s short term technical moves, said the stock market in the coming week could be positioning for a push higher.
“Technically, next week’s a very important week for the market, and my gut tells me it’s going to be to the upside,” he said.
Redler said the major indices are setting up a pattern, called a “wedge.” For the S&P 500, the wedge would trigger a new directional move if the S&P closes in the 1110 to 1115 range. Typically, a a wedge forms after a big move, when the market consolidates, he said. It created the pattern after the S&P peaked at 1150 in January and then corrected to a low of 1044. Its current level is now in the middle of the pattern, a place from where there could be a volatile move in either direction.
Redler says he has a hunch that move will be higher, based on the recent technical strength of some important tech stocks like
Apple, Research in Motion, Baidu, Microsoft, Cisco and Intel. He said if it does move higher, the next target for the S&P would be 1130, and then a possible return to the January high of 1150.
