Technical Analysis Overview

S&P 500 Futures (ESM2025) showed a strong upward trend from May 12 to 17, remaining consistently in an upward channel after a significant jump on May 13. The price stayed above the VWAP mid-line, with notable volume spikes turning the 5,845–5,860 range into a new support level around 5,880–5,900. Immediate resistance is at 5,960, with additional barriers at 5,969, 5,981, and 6,000. If the upward trend continues and the price breaks 5,960, targets include 5,981 and possibly 6,000. On the other hand, failing to close above 5,960 could cause a drop to 5,943 and a retest of the VWAP mid-line. In a bullish scenario, moving above 5,960 would drive prices towards higher resistance levels, while remaining within the channel encourages buying during dips. Conversely, if the price is rejected near 5,960, it may swing lower, leading to further losses if it drops below key support levels like the VWAP band. For traders, a long position is considered if the price exceeds 5,960, while a short position is advisable if it is rejected. Effective risk management, including defined stop-loss orders and position sizing, is essential.

Decision Making and Risk Management

In recent sessions, S&P 500 futures—the ESM2025 contract—have shown a solid upward movement. This increase has been supported by a strong technical base established since a jump at the start of the week. The spike on May 13 boosted volume and confidence, creating a support zone around 5,880 to 5,900, confirmed by activity between 5,845 and 5,860, indicating market strength at these levels. Throughout the week, prices have remained near the top of an upward trading channel and above the VWAP mid-line, suggesting strong momentum from institutional buying. This positioning above the volume-weighted average price indicates that buying interest remains high, while sellers have not succeeded in reversing the trend. Currently, the immediate resistance level is 5,960. This is not just a barrier; it’s a crucial decision point. If futures can push above this level and maintain it, targets may move toward 5,981 and then touch the psychological level of 6,000. These levels are significant due to previous swing highs and short-term trading projections, indicating that a break above 5,960 signals a continued pattern. However, if futures fail to hold above 5,960 despite attempts, it may suggest temporary exhaustion. This could initiate a pullback, pushing the price down to 5,943 and possibly leading back to the VWAP mid-level, which serves as dynamic support within the channel. Breaching this level would indicate a shift in short-term sentiment and increase the likelihood of a more profound decline through previous support zones. It’s important to view these levels as potential turning points rather than just opportunities for aggressive trading. Planning should precede action. Only enter trades when prices show clear commitment through increased volume or strong candle closes. This approach helps avoid being caught in unpredictable market movements. Next week, we will focus on what the price structure indicates. If the 5,960 level is convincingly broken, we will target long setups with stops below invalidation zones, preferably below short-term support or the VWAP channel, to minimize exposure to intraday fluctuations. On the other hand, if the price shows weakness and is firmly rejected at 5,960, it might signal a chance to go short, with clear exit plans in place, especially near previous buying support zones. Position sizing should align with the risk involved. Wider volatility may require smaller positions, while tighter ranges might allow for slightly larger sizes, but never beyond manageable limits. Using VWAP bands to assess bias remains useful, but clarity often comes from the combination of price action, volume, and dynamic levels. In general, when the price remains within an upward channel and above the VWAP, it supports buying during minor retracements—but only when such retracements are backed by volume and structural support. Risks increase when emotions take over, so it’s wise to wait for the right setup, trust the process, and know what would invalidate your position before making a move. We will keep monitoring volume changes and price reactions around resistance, paying close attention to whether momentum holds or breaks beyond the 5,960 level toward the 5,981 to 6,000 range. Observing these reactions will provide more insights than any forecasts. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now