Technical Analysis – US 500 index hovers around 9-month highs
May 23, 2023 12:27 pm
The US 500 stock index (cash) has been steadily gaining ground since mid-March, slicing through crucial technical regions such as its 50- and 200-day simple moving averages (SMAs). In addition, the index jumped to a fresh nine-month peak of 4,214 last Friday and has been rangebound since then.
Despite the recent consolidation, the short-term oscillators remain tilted to the bullish side, hinting that the index could extend its uptrend. Specifically, the MACD is strengthening above both zero and its red signal line, while the RSI has flatlined way above its 50-neutral mark.
Should the price storm to a fresh multi-month high, the July 2021 low of 4,232 could initially cap the index’s upside. Conquering this barricade, the bulls might then challenge the October 2021 low of 4,270. Further advances could then stall around the August 2022 peak of 4,325.
Alternatively, if the price reverses lower, immediate support could be met at 4,146, which is the 78.6% Fibonacci retracement of the 4,325-3,489 downtrend. Should that floor collapse, the spotlight may turn to the double-bottom region of 4,048. Even lower, the 61.8% Fibo of 4,006 could prevent further declines.
In brief, the US 500 index has been moving sideways after peaking at a fresh nine-month high of 4,214. Hence, a failure to create a fresh higher high may open the door for a moderate downside correction.
The US 500 stock index (cash) has been steadily gaining ground since mid-March, slicing through crucial technical regions such as its 50- and 200-day simple moving averages (SMAs). In addition, the index jumped to a fresh nine-month peak of 4,214 last Friday and has been rangebound since then.
Despite the recent consolidation, the short-term oscillators remain tilted to the bullish side, hinting that the index could extend its uptrend. Specifically, the MACD is strengthening above both zero and its red signal line, while the RSI has flatlined way above its 50-neutral mark.
Should the price storm to a fresh multi-month high, the July 2021 low of 4,232 could initially cap the index’s upside. Conquering this barricade, the bulls might then challenge the October 2021 low of 4,270. Further advances could then stall around the August 2022 peak of 4,325.
Alternatively, if the price reverses lower, immediate support could be met at 4,146, which is the 78.6% Fibonacci retracement of the 4,325-3,489 downtrend. Should that floor collapse, the spotlight may turn to the double-bottom region of 4,048. Even lower, the 61.8% Fibo of 4,006 could prevent further declines.
In brief, the US 500 index has been moving sideways after peaking at a fresh nine-month high of 4,214. Hence, a failure to create a fresh higher high may open the door for a moderate downside correction.
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