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Technical Update - Rebound in US equities struggling to gain momentum and seems to fizzle

Equity 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

S&P 500 broken short-term falling trend but resistance at 3,810 could be a struggle to break. Nasdaq 100 rejected at its falling trendline, testing support. A fresh look at Russell 2000 Small Cap Index that stands on solid ground, but will it hold for another test


S&P 500
closed yesterday above its short-term falling trendline trying to close above the GAP but failed. However, key resistance for S&P 500 is at around 3,810. S&P must close above that level to gain upside momentum and even if it does 3,907 will be a tough test.

IF S&P 500 slides back and closes below 3,678 followed by a close back below the upper falling trend line selling is likely to accelerate driving the Index to lows around 3,491 possibly lower.
An RSI close below its rising trendline would be a strong indication of this scenario to unfold.


SP500 d 19oct
Source: Saxo Group
Nasdaq 100 was rejected yesterday at its upper falling trendline in the falling channel the Index has been formed over the past couple of months.
If closing below yesterday’s low and support at around 11,035 October lows at 10,440 is likely to be taken out.  
For Nasdaq 100 gain upside momentum a close of the Gap is needed. But even if that occurs there is strong resistance at around 11,660 and around 12,060. The declining 55 and 100 MSA’s will also provide resistance
Nasdaq100 d 19oct
Source: Saxo Group

The Russell 2000 Small Cap Index is having strong support at around 1,653. It is the upper level of the Consolidation area going back to 2020. There is RSI divergence on weekly time period suggesting a rebound. A rebound that has started and could take Russell 2000 resistance at around 1,900.
However, for the short-term for the rebound to maintain upside momentum it must close above 1,776. It has broken the falling trend line but 1,776 could prove to be too hard to break.
If Russell 2000 instead slides lower moving back below the falling trend line on daily time period and RSI closes below its lower falling trend line on both daily and weekly, the Small Cap Index could drop to around 1,500-1,467.

Russell2000 w 19oct
Russell2000 d 19oct
Source: Saxo Group

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