SPX, QQQ, and PLTR: Key Support and Resistance Levels Drive Market Moves
The Support and Resistance levels proved highly relevant for the week that just ended, let’s analyze the price action for $S&P 500(.SPX)$ $Invesco QQQ(QQQ)$ $Palantir Technologies Inc.(PLTR)$, as observed on these 4-hour charts. The 4H and 2H are the ones I normally use, but you can use shorter timeframes as long as you combine more technical indicators to reduce the risk to fall in fake moves.
For SPX, after opening the week above its central level (the blue line), the price reached its first resistance zone, or bullish target, by Monday at 1:30 PM. This triggered a decline towards the central level, specifically around 6,271.3. These levels can act with remarkable precision, as seen in the following case for QQQ, or they can function as zones, which was the case for SPX as its weekly low remained 10 points above the central level.
This bounce, which formed a bullish 4-hour candle by mid-Tuesday, initiated a robust rally that persisted throughout the week. Price extended well beyond its initial range, breaching previous resistance levels. By the close of the week on Friday, SPX was trading higher, above its second resistance level, clearly demonstrating the efficacy of the central support in validating bullish momentum confirming a new upward trend after the initial dip.
The latest 4-hour candle printed this Friday afternoon indicates indecision; however, any signal of a potential reversal at this moment must be validated to avoid a premature decision. This is a critical period for the stock market, as the price is overbought, yet seasonality and optimism regarding economic news have fueled further momentum.
That said, once the central weekly level is breached, we will have clearer references to consider a healthy pullback as potentially underway, not before. The central level for next week is provided below for SPX and 40+ securities. Let's now examine QQQ and PLTR for more examples of the precision of these levels before sharing the updated levels.
QQQ also found strong footing at its central level as support at $559.2 on Tuesday morning. This level provided a critical bounce, leading to a sustained bullish move throughout the week and confirming the newfound upward momentum.
As long as the central level continues as support any potential reversal formation is not confirmed and it is potentially invalidated.
PLTR, the chart above shows a the bearish target mentioned in the weekly compass last week and a bounce with precision from $145, indicating that price hit a significant support zone before reversing sharply upwards. This strong bounce from a predefined bearish target suggests that key support levels were successfully identified and held, leading to a significant bullish reversal.
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