Technical Analysis – US 100 index forms bearish channel
June 27, 2023 2:26 pm
The US 100 stock index (cash) rotated southwards after touching the crucial 15,280 zone, where it peaked in February and March 2022 before it changed direction to the downside. Getting rejected for the third time around that same region, the index might be exposed to another stormy session ahead.
The price is currently trading at the lower boundary of the short-term descending channel in the four-hour chart, suggesting a potential upside move before the bearish wave continues. For that to happen, the index will need to crawl above the previous low of 14,785. In this case, the 20-period simple moving average (SMA) at 14,865 and the channel’s upper boundary at 14,900 could immediately come under the spotlight. A successful penetration higher and beyond the 50-period SMA could lift the price up to the top of 15,280. The next target could be the 15,655 constraining zone last seen during September 2021-January 2022.
Technically, the strengthening oversold signals coming from the RSI and the stochastic oscillator are endorsing a pause in the short-term negative trajectory. Yet, there is no clear indication that the technical oscillators have bottomed out. Should the bears break below the channel at 14,668, support could next develop around the ascending line from November 2022 at 14,434. Notably, the 23.6% Fibonacci retracement of the March-June uptrend is placed in the same region, while the 200-period SMA is within breathing distance too. A violation of this base could instantly press the price towards the floor of 14,215, where the index bounced twice in June.
Summing up, the US 100 stock index could recoup some lost ground within the downward-sloping channel, with the confirmation likely coming above 14,785.
The US 100 stock index (cash) rotated southwards after touching the crucial 15,280 zone, where it peaked in February and March 2022 before it changed direction to the downside. Getting rejected for the third time around that same region, the index might be exposed to another stormy session ahead.
The price is currently trading at the lower boundary of the short-term descending channel in the four-hour chart, suggesting a potential upside move before the bearish wave continues. For that to happen, the index will need to crawl above the previous low of 14,785. In this case, the 20-period simple moving average (SMA) at 14,865 and the channel’s upper boundary at 14,900 could immediately come under the spotlight. A successful penetration higher and beyond the 50-period SMA could lift the price up to the top of 15,280. The next target could be the 15,655 constraining zone last seen during September 2021-January 2022.
Technically, the strengthening oversold signals coming from the RSI and the stochastic oscillator are endorsing a pause in the short-term negative trajectory. Yet, there is no clear indication that the technical oscillators have bottomed out. Should the bears break below the channel at 14,668, support could next develop around the ascending line from November 2022 at 14,434. Notably, the 23.6% Fibonacci retracement of the March-June uptrend is placed in the same region, while the 200-period SMA is within breathing distance too. A violation of this base could instantly press the price towards the floor of 14,215, where the index bounced twice in June.
Summing up, the US 100 stock index could recoup some lost ground within the downward-sloping channel, with the confirmation likely coming above 14,785.
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