FxWirePro: Sell S&P 500 targeting 1950

In recent days, the market has shown signs of risk aversion, which has led to big selloffs in some indexes globally like Japanese Nikkei, UK’s FTSE 100 etc. Yet S&P 500 has broadly maintained its strength. It is just around 60-70 points down from its all-time high around 2140 area.   

Moreover, S&P 500 recovered sharply after yesterday after five days of consecutive selloffs that pushed it to as low as 2050 area. UK referendum is now just four trading days away and we expect a high level of bookings in the coming days. In addition to that, if the UK is to exit from the union, heavy market turmoil is expected in the following days, and volatility will shot up further if the exit leads to political turmoil as well. There could be political turmoil even if UK votes to stay but by a small margin.

With these upcoming tensions in focus, we expect S&P 500 to suffer heavy profit bookings at the very least.

Trade idea –

• Sell S&P 500 at current price 2076 and at rallies with a target around 1950 and stop loss at 2120 area. Key resistance is around 2090.