Technical Analysis – US 500 index extends sideways move
May 15, 2023 8:28 am
The US 500 stock index (cash) has been gaining ground since mid-March, slicing through both its 50 and 200-day simple moving averages (SMAs). Nevertheless, this recent advance faltered just shy of the 2023 peak of 4,195, with the price entering a consolidation phase beyond the 4,000 psychological mark.
The momentum indicators are tilting towards the bearish side. Specifically, the MACD dropped below its red signal line but remains in the positive zone, while the stochastic oscillator is ticking down after posting a bearish cross. However, the price is currently way beyond the Ichimoku cloud, hinting that the short-term technical picture has not turned negative yet.
If the selling interest intensifies, the price could descend towards 4,048, which is the lower end of the recent rangebound pattern and held its ground twice in the past month. A violation of that zone could open the door for 4,006, which is the 61.8% Fibonacci retracement of the 4,325-3,489 downtrend. Should that barricade fail, the bears might then target the 50.0% Fibo of 3,907.
On the flipside, bullish actions could face initial resistance at the 78.6% Fibo of 4,146. Clearing this hurdle, the price may extend its advance towards the 2023 peak of 4,195. A jump above that zone would send the price towards levels not seen in the past nine months, where the August 2022 high of 4,325 could curb any upside attempts.
To conclude, the US 500 index has been directionless after its short-term uptrend encountered resistance near the 2023 high. However, the price retains its short-term bullish structure and only a break below the 200-day SMA could shift the outlook to bearish.
The US 500 stock index (cash) has been gaining ground since mid-March, slicing through both its 50 and 200-day simple moving averages (SMAs). Nevertheless, this recent advance faltered just shy of the 2023 peak of 4,195, with the price entering a consolidation phase beyond the 4,000 psychological mark.
The momentum indicators are tilting towards the bearish side. Specifically, the MACD dropped below its red signal line but remains in the positive zone, while the stochastic oscillator is ticking down after posting a bearish cross. However, the price is currently way beyond the Ichimoku cloud, hinting that the short-term technical picture has not turned negative yet.
If the selling interest intensifies, the price could descend towards 4,048, which is the lower end of the recent rangebound pattern and held its ground twice in the past month. A violation of that zone could open the door for 4,006, which is the 61.8% Fibonacci retracement of the 4,325-3,489 downtrend. Should that barricade fail, the bears might then target the 50.0% Fibo of 3,907.
On the flipside, bullish actions could face initial resistance at the 78.6% Fibo of 4,146. Clearing this hurdle, the price may extend its advance towards the 2023 peak of 4,195. A jump above that zone would send the price towards levels not seen in the past nine months, where the August 2022 high of 4,325 could curb any upside attempts.
To conclude, the US 500 index has been directionless after its short-term uptrend encountered resistance near the 2023 high. However, the price retains its short-term bullish structure and only a break below the 200-day SMA could shift the outlook to bearish.
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