Market Facing Resistance - Market Analysis for Feb 14th, 2021
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In last weekend's report we wrote: "Internal indicators are all on the buy side now and the Odds indicators are on the sell side. Which way will this resolve is the question. Usually when the Odds indicator holds on like this, we get a reset lower eventually.. And with an additional smaller timeframe one triggering on Friday, it is suggesting we get a pullback very soon targeting somewhere in the 3800/3750 area. Once there, we have to see if any buy signal sets up for another move higher OR if that support area at 3750 is broken for a retest of the lows near 3600. This coming week Wednesday is WWW - the Wednesday of the week before OPEX week - Usually we see some kind of price reset lower which sets up a rally into OPEX week which is the third week of the month."
What actually happened is we did get a pullback on Wednesday that lasted a couple of hours before turning back north to end at highs by the end of the week.
Looking ahead to this week, options data is on the bullish side. Internals are also on the bullish side, though not by much. Price action is short-term bullish, medium-term bullish and long-term bullish. We are flat the market. Primary trade is flat and Complimentary trade should be long -- however I am flat because of reasons earlier outlined. Odds signal got stopped out on Friday and the second signal while still active will get stopped out if we get above 3955 during regular hours this week.
In spite of the big move to end the day on Friday, we are hitting some significant resistance zones around here on comparatively weaker internals. So my outlook is that the market is likely to face resistance in the 3950-80 area and finally begin a pullback to reset into the 3800/3750 area in coming weeks.
Looking at the grey zone resistance, it is at 3952-63 and then in the 3975 area. Support is at 3928-18, 3879-68, 3851-40, 3817-07, 3764-55, 3727-17 and then at 3665-55.
For Tuesday, daily pivot is at 3921. Resistance R1 is at 3951 and R2 at 3967. Support S1 is at 3905 and S2 at 3875.
All the best to your trading week ahead.
