Technical Analysis – US 30 cash index advance continues
April 3, 2023 1:27 pm
The US 30 cash index has been enjoying a strong rally since the March 15 low of 31,426, in line with other main equity markets. It managed to overcome some key levels with relative ease and it is now hovering just below the busy 33,518-33,754 range. The bulls appear to be enjoying this period and understandably so. The overall technical picture remains in their favour.
The Average Directional Movement Index (ADX) is edging higher in support of the current rally. Similarly, the stochastic oscillator is moving higher in an almost vertical fashion, increasing its gap from its moving average. This is a typical bullish move, but the bulls have to monitor the stochastic more closely going forward. A higher high print in this indicator matched with a lower high in the US 30 index could spell trouble for the bulls. In addition, if the next index peak proves to be below the recent highs of 34,280-34,513, the bears would be entitled to deem this lower high as another point in the recent series of lower highs and lower lows. And hence treat the current move as just a correction and potentially a tradable opportunity.
Should the bulls continue to push the market higher, the initial resistance could be the 33,518-33,754 range, defined by the 61.8% Fibonacci retracement of the January 5 – October 3 downtrend and the October 1, 2021 low. Higher, the August 16 and December 13 highs at 34,280 and 34,930 respectively could make the bulls’ life more difficult.
On the other hand, if the bears take over control of the market and clear the simple moving averages (SMAs) standing in their way, they could face resistance at the June 21, 2021 low of 33,028. Even lower the 32,462-32,767 range, populated by the 50% Fibonacci retracement and 200-day SMA, could prove a stronger support area.
To sum up, the recent bullish trend in the US 30 cash index continues to enjoy strong support from momentum indicators. However, the bulls need to clear further key levels and record higher highs to declare a short-term victory.
The US 30 cash index has been enjoying a strong rally since the March 15 low of 31,426, in line with other main equity markets. It managed to overcome some key levels with relative ease and it is now hovering just below the busy 33,518-33,754 range. The bulls appear to be enjoying this period and understandably so. The overall technical picture remains in their favour.
The Average Directional Movement Index (ADX) is edging higher in support of the current rally. Similarly, the stochastic oscillator is moving higher in an almost vertical fashion, increasing its gap from its moving average. This is a typical bullish move, but the bulls have to monitor the stochastic more closely going forward. A higher high print in this indicator matched with a lower high in the US 30 index could spell trouble for the bulls. In addition, if the next index peak proves to be below the recent highs of 34,280-34,513, the bears would be entitled to deem this lower high as another point in the recent series of lower highs and lower lows. And hence treat the current move as just a correction and potentially a tradable opportunity.
Should the bulls continue to push the market higher, the initial resistance could be the 33,518-33,754 range, defined by the 61.8% Fibonacci retracement of the January 5 – October 3 downtrend and the October 1, 2021 low. Higher, the August 16 and December 13 highs at 34,280 and 34,930 respectively could make the bulls’ life more difficult.
On the other hand, if the bears take over control of the market and clear the simple moving averages (SMAs) standing in their way, they could face resistance at the June 21, 2021 low of 33,028. Even lower the 32,462-32,767 range, populated by the 50% Fibonacci retracement and 200-day SMA, could prove a stronger support area.
To sum up, the recent bullish trend in the US 30 cash index continues to enjoy strong support from momentum indicators. However, the bulls need to clear further key levels and record higher highs to declare a short-term victory.
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