The S&P 500 is in serious trouble and could sink more than 20 percent to 600 points, Nick Batsford, technical analyst from Hobart Capital, told CNBC.
“This is absolutely horrific price action … this is in trouble,” Batsford said while looking at the S&P charts.
He gave an initial downside target of 750 points, which if broken could give way to 600 points over the coming weeks and months.
“This is defiantly play defense, not offense right here right now,” Batsford advised investors.
- Watch the full interview to the left.
The index closed at 779 on Thursday on the back of a bad day for US stocks that saw the Dow Jones Industrial Average careen below its November lows, sparking fears of a dramatic selloff.
“Yesterday we’ve seen the lowest close since the problems started about one and half years ago,” Royce Tostrams, technical analyst from Tostrams Groep, told CNBC.
“We see a series of lower peaks, that still suggests selling pressure, so the flags are still red,” he added.
Despite the November lows being broken, Tostrams said there is hope that Dow could avert a nose-dive decline and maybe even rise.
“On the positive side, you still see low volume in the past few sessions. That signals that selling pressure is drying up,” he said.
There is a strong support zone between 7,450 points, the November lows of last year, and 7,200 points, the October low of 2002, according to Tostrams.
“If this support area will hold … then there will be very much upside potential,” he said.
- Watch the full Royce Tostrams interview above.
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