Weekly Technical Analysis of the S&P 500 E-mini Contract: A Simplified Look
In this technical analysis of the S&P 500 E-mini futures
Futures
A forward or futures contract is a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. It should be noted that the two parties are not known to each other, and these transactions usually involve commodities or other securities that involve buying and selling at a forward or pre-determined price, and futures contracts have a delivery date that determines the date of delivery and payment. For other forms of forward investment are more complex, such as
A forward or futures contract is a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. It should be noted that the two parties are not known to each other, and these transactions usually involve commodities or other securities that involve buying and selling at a forward or pre-determined price, and futures contracts have a delivery date that determines the date of delivery and payment. For other forms of forward investment are more complex, such as
Read this termWe focus on the weekly time frame to provide a clear and simple picture without using many indicators. The goal is to decipher the story the S&P 500 is telling and identify potential entry points for a journey up to 4200.
Price Action Analysis: Bullish Piercing and Bear Trapping
On the weekly chart, we notice that the price has fallen below last week’s low and 20 EMA (black line). This action triggered long stop-loss orders and stimulated the bears to sell, trapping them in the process. The presence of two wicks in consecutive weeks and a close close to the last week open indicates a bullish breakout and the bears are trapped, indicating a bullish bias.
The main resistance level: 4200
The next important price level to watch is the resistance at 4200, which has been tested several times but not overcome since August 2022. A weekly candle close above this level would confirm the bullish bias.
Line in the sand: weekly close below the 20 EMA
A weekly candle closing below the 20 EMA (currently at 4081.25) would indicate that the bullish case is over, and traders should re-evaluate their positions.
Regression trend analysis: an upward channel
Using the regression trend from the October 2022 pivot low and adjusted to 2 standard deviations, we see that the price is trading inside an ascending channel. The current position in the green part of the channel indicates a possible move to test the level of 4300.
Daily timeframe: Possible entry points for a bullish lead
For those looking to join the bullish ride, a potential entry point is around 4130, near the 20 EMA. This level can provide a good risk-reward ratio
risk/reward ratio
In financial trading, risk to reward is a ratio that simply compares the potential risk of a trade against its potential return. It is used by traders to determine the long-term viability of a trading system. First of all, it is important to note that there is a globally approved risk/reward ratio. Many inexperienced traders often ask the question what risk/reward ratio they should use for their system. This depends on the type of system being traded. In fact, fixing aiming
In financial trading, risk to reward is a ratio that simply compares the potential risk of a trade against its potential return. It is used by traders to determine the long-term viability of a trading system. First of all, it is important to note that there is a globally approved risk/reward ratio. Many inexperienced traders often ask the question what risk/reward ratio they should use for their system. This depends on the type of system being traded. In fact, fixing aiming
Read this term With a target of 4200. Traders can choose a stop loss level below 4100 (for example, 4096) to reduce risks.
Reward versus risk: a legitimate buy
As the above ES technical analysis video shows as guidance for traders and investors to consider (at their own discretion), if executed at 4130, targeting the long trade 4200 offers a reward-to-risk ratio of more than 2:1, making it a legitimate and attractive trade for potential bulls.
Summary: The bias is bullish until 4200
In conclusion, the simplified technical analysis of the S&P 500 E-mini futures indicates a bullish bias until reaching the 4200 level. Traders should closely monitor key levels and price action, and always trade at their own risk.