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Berger: S&P will bounce back
Serge Berger, also known as The Steady Trader, is looking to buy the S&P 500 on an oversold bounce. Last week the index dropped around 3%, bringing its total sell-off from the September 19th high to about 5.50%. Serge explains that in the bigger picture that’s not much particularly as the German Dax for example is about 10% off its highs.
Through a technical lens however the index last Friday reached a good horizontal reference area of support near 1905, made up of the August lows as well as the rising 200 day simple moving average.
From a momentum perspective the index is oversold, given the strength of the selling last week which culminated at the end of the week. However, Serge would prefer to see the index drop a little lower toward 1890. Because trying to catch a falling knife is not a very sound trading strategy, Serge prefers to wait for the index to give signs that sellers are exhausted and that buyers can take over for a bounce.
He plans to buy after a bullish reversal day and a close back above 1910
Upside target: 1940
Stop loss: 1890
01:34 minutes
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