As of May 16, 2025, the S&P 500 Index (SPX) closed at 5,958.38, marking a 0.70% increase for the day. The index has recently surpassed its 200-day moving average, a significant technical milestone indicating strong bullish momentum.
Monthly Chart Overview
The S&P 500 Index (SPX) exhibits a strong bullish monthly candle with a minimal lower wick, indicating sustained upward momentum and limited selling pressure.
Weekly Chart Insights
The past four weekly candles have closed bullish, reflecting consistent buying interest. However, the current week’s candle shows signs of consolidation, suggesting a potential pause in the uptrend. chartexpertise.com
Key Resistance Level: 5983
The 5983 level serves as a significant resistance point, previously acting as a supply zone. Given its historical importance, there’s a high probability of price reacting at this level, potentially leading to short-term pullbacks.
Trading Strategy
🔻 Sell Setup (Gap-Up Scenario)
- Entry Point: If the market opens near the 5983 resistance level, monitor the 5-minute chart for a Green candle formation when it low cross sell it or Use 5 EMA Setup.
- Trade Execution: Initiate a short position when the price breaks below the low of the alert candle, confirming downward momentum.
- Stop Loss: Place the stop loss above the high of the entry candle.
- Target: Aim for the 5946 level, ensuring a favorable risk-reward ratio.
🔼 Buy Setup (Gap-Down Scenario)
- Entry Point: If the market gaps down by 0.5% to 1%, switch to a 15-minute chart and look for a red candle closing or Use 5 EMA Setup.
- Trade Execution: Enter a long position when the price breaks above the high of the alert candle, indicating bullish momentum.
- Stop Loss: Set the stop loss below the low of the entry candle.
- Target: Target the 5983 resistance level, adjusting based on intraday price action.
Additional Tips
- 5 EMA Strategy: The 5 EMA is a responsive indicator, ideal for capturing short-term price movements. chartexpertise.com
- Golden Crossover: For enhanced confirmation, consider the EMA 4-9-18 crossover strategy, which can provide additional entry signals. chartexpertise.com+1chartexpertise.com+1
- Risk Management: Always adhere to strict risk management rules, ensuring that potential losses are minimized.
Conclusion
The SPX demonstrates strong bullish momentum, but the presence of a significant resistance level at 5983 suggests potential short-term consolidation. By employing the 5 EMA strategy, traders can identify precise entry and exit points, capitalizing on intraday price movements. Always remain vigilant and adjust strategies based on real-time market conditions.
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Disclaimer: Trading involves risk. Ensure thorough research and consult with financial advisors before making investment decisions.