Technical Analysis – US 100 cash index edges lower; all eyes on the stochastic
April 19, 2023 8:27 am
US 100 cash index is edging lower today as the bulls appear to be taking a breather following a decent move higher since the March 13 low. Their attempts to break the 13,206 level during April have failed, prompting a potential rethink of their strategy. Consequently, market volatility has been dropping with the Bollinger Bands tightening aggressively. Similarly, the various simple moving averages (SMAs) employed in our analysis have started to move horizontally, revealing a delicate market balance.
The momentum indicators are equally mixed with the RSI remaining at 50 but moving horizontally and making lower highs. With the Average Directional Movement Index (ADX) sunk below its 25-threshold, the focus turns to the stochastic oscillator. This indicator is trying to move back inside the overbought area, battling with its moving average (MA).
Should this occur, bulls would probably feel more confident to stage another move higher. They would quickly push for a retest of the August 26, 2022 high of 13,206. Higher, the busier 13,600-13,721 range, populated by the August 16, 2022 high and 50% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend respectively, would probably prove tougher to crack.
If the stochastic oscillator fails to edge above its MA, the bears could try to quickly push the US 100 index towards the 50% Fibonacci retracement of 12,852 and the “inner Bollinger line”. If successful in breaking these support points, the path looks clear until the 12,465-12,554 range set by September 2, 2020 high and the 50-day SMA.
To sum up, the bulls managed to push the index higher amidst a difficult period. All eyes are on the stochastic oscillator’s move that will most likely play a crucial role in dictating the next short-term trend.
US 100 cash index is edging lower today as the bulls appear to be taking a breather following a decent move higher since the March 13 low. Their attempts to break the 13,206 level during April have failed, prompting a potential rethink of their strategy. Consequently, market volatility has been dropping with the Bollinger Bands tightening aggressively. Similarly, the various simple moving averages (SMAs) employed in our analysis have started to move horizontally, revealing a delicate market balance.
The momentum indicators are equally mixed with the RSI remaining at 50 but moving horizontally and making lower highs. With the Average Directional Movement Index (ADX) sunk below its 25-threshold, the focus turns to the stochastic oscillator. This indicator is trying to move back inside the overbought area, battling with its moving average (MA).
Should this occur, bulls would probably feel more confident to stage another move higher. They would quickly push for a retest of the August 26, 2022 high of 13,206. Higher, the busier 13,600-13,721 range, populated by the August 16, 2022 high and 50% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend respectively, would probably prove tougher to crack.
If the stochastic oscillator fails to edge above its MA, the bears could try to quickly push the US 100 index towards the 50% Fibonacci retracement of 12,852 and the “inner Bollinger line”. If successful in breaking these support points, the path looks clear until the 12,465-12,554 range set by September 2, 2020 high and the 50-day SMA.
To sum up, the bulls managed to push the index higher amidst a difficult period. All eyes are on the stochastic oscillator’s move that will most likely play a crucial role in dictating the next short-term trend.
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