Are you hoping to capitalize on recent influxes of risk aversion?
Banking sector concerns are at it again, and it doesn’t help that traders are also concerned about a possible recession in the US.
If this type of market mood continues, we may see further declines in risk assets such as stocks.
In this case, the S&P500 may have more room to head south, which could maintain the bearish momentum until the triangle support.
S&P 500 (SPX500) 4-Hour Chart By TradingView
As you can see from the 4-hour chart above, the stock index has been making higher lows since late last year and encountered resistance near 4,150.
Now that is the ascending triangle pattern right there!
Now the ceiling is holding again, forcing the price to turn its sights down once again on the triangle support, which appears to be near the 4000 mark.
Bearish sentiment could linger if risk aversion spills over into financial markets, but any sign of relief could prompt a rebound soon.
Technical indicators indicate that support levels are more likely to hold than to be broken. The 100 SMA is above the 200 SMA, with the latter likely to hold as a nearby dynamic support.
Also, the stochastic is oversold to reflect exhaustion among sellers, so a shift to the upside means bullish pressure could return.
If so, watch for a possible bounce to the top of the triangle near the 100 SMA a dynamic inflection point.