Stocks Will Rebound After Friday’s Rout, But Is Correction Over?
Sunshine Profits | Nov 29, 2021 11:13AM ET
The S&P 500 sold off on Friday after news about the new COVID variant. Today, we will likely see a rebound, but the short-term picture remains bearish.
The S&P 500 index lost 2.27% on Friday, Nov. 26, as investors reacted to the news about new COVID variant detected in South Africa. The market broke below its recent local lows and it got away from the 4,700 level. The Friday’s trading action looked like a meaningful downward reversal.
The nearest important ):
Nasdaq 100 Fell Closer to 16,000
Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market on Friday, as it didn’t break below the early November local low. However, it got close to the 16,000 level and it retraced almost 800 points from its last Monday’s new record high of 16,764.85. The index closed above the 16,000 mark on Friday, as we can see on the daily chart:
Apple Is At Previous High
Let’s take a look at biggest stock in the S&P 500 index: Apple (NASDAQ:AAPL). Apple accelerated its uptrend a week ago on Monday and it reached the new record high of $165.70. However, it retraced almost all of its intraday advance that day. On Friday, it got back to a potential support level of around $157. For now, it looks like a downward correction.
Conclusion
The S&P 500 index is expected to open 1.0% higher this morning, as global markets are shrugging off the new COVID fears. We will likely see an intraday consolidation following higher opening. The broad stock market index may enter a flat correction within a short-term downtrend.
Get The News You Want
Here’s the breakdown:
- The S&P 500 traded within a short-term topping pattern last week and on Friday it suffered a more than 2% sell-off.
- A speculative short position is still justified from the risk/reward perspective.
- We are expecting a 5% correction.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.