The TSP stock funds had a pretty good rally given the short holiday trading week. For the week the C fund was up 1.65%, S fund up 1.32%, and I fund up 0.67%. Not a huge price move on a weekly basis BUT, the technical analysis points to prices likely moving higher from here.
The S&P500 (C Fund) is approaching its upper channel line at 3000. Since the C fund closed at new all-time highs this week, it is very likely that we will see 3000 next week or the week after. Right now, the 3000 level is a ceiling/resistance. If the 3000 level becomes support, the market moves higher from here for the foreseeable future… IF the C fund rolls over at 3000 then we have a 20% decline down to the lower channel line…
The S fund is also in an expanding triangle consolidation. After a strong rally this week, the S fund is likely hit its upper channel line and test 1500; almost a 5% move higher from the current level.
The I fund closed above its prior high of 65.58 and is likely on its way to testing its January 2018 high. A retest of the 2018 high would mean about a 9% move higher from here…
Bottom Line: The S and I funds are set up to move higher before hitting serious resistance. The C fund does not have as much room to move up. Ultimately, all 3 stock funds will break thru their respective resistance levels OR they will roll over. The risk reward ratio (short term) is actually pretty favorable right now; especially for the S and I funds.
We are not out of the woods yet but, if you watch the market closely, now is not a bad time to buy a little S and I fund. The upside targets are clear on the chart and you can always cut your losses if the market rolls over… As always, it’s about risk management and personal risk tolerance.
Have a great weekend!