Technical Analysis – US 100 stock index takes a negative angle
August 11, 2023 1:28 pm
The US 100 stock index (cash) is marking its second negative week, edging slightly below its 50-day simple moving average (SMA), which switched from support to a resistance area at 15,180.
The bearish evening star candlestick pattern at the top of the uptrend makes the short-term picture look ugly, warning that the bearish wave might have just started.
On the other hand, the stochastic oscillator raises optimism that the bears could soon take a breather as the indicator hovers around its 20 oversold level. The price itself is trading around the lower Bollinger band and marginally above the November ascending line, which added fresh bullish fuel to the price at the start of June. Hence, the market could show some stabilization or attempt to recoup some lost ground before it heads lower again as the clear negative trajectory in the RSI and the MACD flags.
In the event the index slips below 14,925, support could immediately develop around the previous low of 14,687. A decisive close lower would signal a bearish trend reversal, likely sinking the price towards the 14,230 base or down to the 14,000 psychological level in the aftermath.
On the upside, the area between the 20- and 50-day SMAs could ruin any recovery attempts. If the bulls claim that region, they may next target the top of the uptrend at 15,800-15,931. A step higher from there would brighten the long-term positive outlook, lifting the index with strong momentum up to the 16,280 region.
In a nutshell, the bullish trend in the US stock index is showing some cracks, with sellers expected to step in again below the 14,925-14,680 zone.
The US 100 stock index (cash) is marking its second negative week, edging slightly below its 50-day simple moving average (SMA), which switched from support to a resistance area at 15,180.
The bearish evening star candlestick pattern at the top of the uptrend makes the short-term picture look ugly, warning that the bearish wave might have just started.
On the other hand, the stochastic oscillator raises optimism that the bears could soon take a breather as the indicator hovers around its 20 oversold level. The price itself is trading around the lower Bollinger band and marginally above the November ascending line, which added fresh bullish fuel to the price at the start of June. Hence, the market could show some stabilization or attempt to recoup some lost ground before it heads lower again as the clear negative trajectory in the RSI and the MACD flags.
In the event the index slips below 14,925, support could immediately develop around the previous low of 14,687. A decisive close lower would signal a bearish trend reversal, likely sinking the price towards the 14,230 base or down to the 14,000 psychological level in the aftermath.
On the upside, the area between the 20- and 50-day SMAs could ruin any recovery attempts. If the bulls claim that region, they may next target the top of the uptrend at 15,800-15,931. A step higher from there would brighten the long-term positive outlook, lifting the index with strong momentum up to the 16,280 region.
In a nutshell, the bullish trend in the US stock index is showing some cracks, with sellers expected to step in again below the 14,925-14,680 zone.
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