Technical Analysis – US 100 cash index rally continues; how high can it go?
June 13, 2023 7:28 am
The US 100 index has recorded a new 2023 high and it is currently hovering around the highest level since April 6, 2022. The rally since the March 13, 2023 low has been almost exponential, but similar to the increases seen in other stock indices. The bears are clearly hoping for a correction, but their expectations have been proven false up to now.
The bulls are probably feeling confident the rally will continue but some cracks have appeared at the momentum indicators. The Average Directional Movement Index (ADX) remains elevated, a tad below its highest level since November 2021, but it appears to have reached its peak. A strong sideways or downward move would be a hint that the rally might have concluded.
In addition, the higher highs in the US 100 index have not been met by similar prints by the stochastic oscillator. A break of the stochastic below both its moving average and overbought territory will most likely cause the first strong correction since the March 2023 banking sector-induced downleg.
Should the bears finally try to limit their recent losses, they would try to push the index toward the 14,346-14,382 range and the April 29, 2021 high at 14,075 respectively. These short-term wins could really help them build momentum into in order to tackle the busier 13,556-13,721 range, which is defined by the August 16, 2022 high, the 50% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend and the 50-day simple moving average (SMA) respectively.
On the other hand, if the bulls remain committed to making higher highs, they would try to keep the US 100 index above the 14,346-14,382 area and then target the round 15,000 level. Even higher, the key 15,258-15,411 range, populated by the March 30, 2022 high and the 78.6% Fibonacci retracement, awaits them.
To sum up, the US 100 cash index rally continues unabated. However, some cracks have appeared, opening the door to the overdue correction.
The US 100 index has recorded a new 2023 high and it is currently hovering around the highest level since April 6, 2022. The rally since the March 13, 2023 low has been almost exponential, but similar to the increases seen in other stock indices. The bears are clearly hoping for a correction, but their expectations have been proven false up to now.
The bulls are probably feeling confident the rally will continue but some cracks have appeared at the momentum indicators. The Average Directional Movement Index (ADX) remains elevated, a tad below its highest level since November 2021, but it appears to have reached its peak. A strong sideways or downward move would be a hint that the rally might have concluded.
In addition, the higher highs in the US 100 index have not been met by similar prints by the stochastic oscillator. A break of the stochastic below both its moving average and overbought territory will most likely cause the first strong correction since the March 2023 banking sector-induced downleg.
Should the bears finally try to limit their recent losses, they would try to push the index toward the 14,346-14,382 range and the April 29, 2021 high at 14,075 respectively. These short-term wins could really help them build momentum into in order to tackle the busier 13,556-13,721 range, which is defined by the August 16, 2022 high, the 50% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend and the 50-day simple moving average (SMA) respectively.
On the other hand, if the bulls remain committed to making higher highs, they would try to keep the US 100 index above the 14,346-14,382 area and then target the round 15,000 level. Even higher, the key 15,258-15,411 range, populated by the March 30, 2022 high and the 78.6% Fibonacci retracement, awaits them.
To sum up, the US 100 cash index rally continues unabated. However, some cracks have appeared, opening the door to the overdue correction.
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