The stock market gained ground last week in dull holiday trading, as I pointed out in the latest Market Week show. The S&P 500 (SPX) rose 31 points to 3141, an increase of 1%.
On Wednesday, stocks hit new all time highs but later slumped after President Trump signed legislation in support of the Hong Kong democracy protesters. This had limited impact on markets though as it occurred on the evening before Thanksgiving. China responded with nonspecific measures, signaling that they will not let this affect the ongoing trade talks.
S&P 500 (SPX) Daily Chart
Our approach to technical analysis uses market cycles to project price action. Our analysis is that the SPX will flatten out up here, as shown on the chart above. With the index having shifted to an 18-day cycle, our target is $3115 within the context of the current 9-day minor cycle.
Let’s also take a look at an individual stock that moved significantly last week. Alibaba (BABA) rose by 7% to $200. The stock spiked earlier in the week, after it launched a secondary listing on the Hong Kong Stock Exchange.
Alibaba (BABA) Stock Weekly Chart
BABA is clearly still in the rising phase of its current cycle. Based on its Fibonacci extensions, it is approaching its target zone. We believe it will stall between $200 to $205.
For a more detailed analysis of both of these charts, check out the latest episode of the askSlim Market Week show.