S&P500: Short Term Risk Down

Technicals | Apr 12 2022

By Michael Gable 

The Australian share market seems to be topping out at the moment and is set to cool off slightly. It is hard to know where it might find support, as the chart is a bit messy.

What is interesting, however, is the chart of the S&P 500 Index. That seems to have more structure in it and we have included an analysis of that in today's report.

The pace of selling in the last two weeks has us cautious on the S&P 500 Index.

As pointed out a few times recently, because markets have bounced so strongly and made up so much ground from the lows, it makes us confident that a low is already in place and any weakness from here should be contained above the March low.

Although short-term risk is to the downside, however, we can see a possible inverse head and shoulders developing.

An inverse head and shoulders would be a bullish sign, but we need to see it develop first. If we can see a bounce somewhere between here and 4300, then that would give us the right shoulder.

A rally would then have to go back above the neckline (blue line near 4600). There are a number of "ifs" and "buts" in there, but it is worth watching out for. At the moment, short-term risk is down towards near 4300.

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services. 

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
 

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