S&P 500 H4 – Bulls are cautiously testing the market

Written on 01/03/2022 by Theunis Kruger, FX Trainer at FXTM

The S&P 500 on the H4 time frame was in a downtrend until a last lower bottom formed on 24^th February at 4105.9.

After the lower bottom, the bulls made their move. The price broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator following in tandem by breaking through the baseline into bullish terrain.

A possible critical resistance level formed on 25^th February at 4384.6, and the bears then tried to get back in control. However, a support level at 4261.7 stopped them on 28^th February, and the bulls are currently cautiously testing to see if they can get the upper hand again.

During the 28th February market session, the price just broke the 4384.6 resistance level, and three possible price targets could have been considered from there. The following targets were calculated attaching the Fibonacci tool to the higher top at 4384.6 and dragging it to the bottom of the support level at 4261.7. The first target was estimated at 4460.6 (161.8%). The second price target was considered at 4583.5 (261.8%), and the third and final target can be anticipated at 4782.3 (423.6%).

If the support level at 4261.7 is broken, the above scenario is annulled, and any remaining risk must be carefully managed.

As long as the bulls continue to test the market and demand overcomes supply, the outlook for S&P500 on the H4 time frame will remain bullish.

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Nigel Frith

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