U.S. equity markets appear to be off to a cautious start to date this 12 months, leading the S&P 500 index to consolidate inside a triangle pattern.

Which way can it break out?

Take a have a look at these potential support and resistance zones on the 4-hour chart:

S&P 500 Index (SP500) 4-hour Forex Chart by TradingView

Sentiment has been shifting on a dime over the past few weeks, as traders proceed to weigh the implications of the incoming Trump administration and a potentially less dovish Ate up the financial markets.

The S&P 500 index has formed higher lows and lower highs since mid-December, making a symmetrical triangle visible on its 4-hour time-frame.

The index is hovering above the triangle bottom, still deciding whether to bounce or to interrupt. Are buyers about to defend this support area?

Keep in mind that directional biases and volatility conditions in market price are typically driven by fundamentals. In case you haven’t yet done your homework on the U.S. stock market, then it’s time to envision out the economic calendar and stay updated on every day fundamental news!

Reversal candlesticks seem like forming on the triangle support, suggesting that a move back as much as the highest near the $6,000 mark could follow. Sustained bullish momentum past the highest of the triangle could even lift the equity index to the subsequent upside goal at R2 ($6,079.52).

Nonetheless, the 100 SMA just crossed below the 200 SMA to suggest that the trail of least resistance is to the downside.

Look out for long red candles hinting that bears are taking the upper hand, as this could possibly be followed by a drop to the subsequent support zones at S1 ($5,851.86) then S2 ($5,762.36).

Whichever bias you find yourself trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that might influence overall market sentiment!