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Technical Update - Relief rally is brewing in US equities but Indices must break strong resistance to confirm

Equity 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  S&P 500 close to test falling trendline. Could move higher in coming days. Nasdaq is trading above its falling trendline with higher lows. Must break strong resistance to confirm uptrend
US500 and USNAS100 cfd's (futures) indicates test of resistance levels


S&P 500 bounced strongly Thursday after dipping below support at 3,738. Followed through Friday gapping higher at the open. Likely to test the falling trend today and quite possible closing above it.
If it does S&P 500 is likely to test the strong resistance at 3,975.
If closing the gap, support at 3,738 is likely to be broken with a test of June lows to follow

SP500 18 jul
Source: Saxo Group

 

At the time of writing the US500 cfd (S&P 500 future) is testing its falling trend line. If breaking above US500 is likely to test 0.618 retracement at 3,986 and quite possibly also the 4.000 level.

US500 18 jul
Source: Saxo Group

Nasdaq 100 tested the falling (black) trend line from the upper side only to bounce off from it. Is it forming an Ascending triangle pattern? Regardless of that, 0.618 retracement and strong resistance at around 12,176 is likely to be tested in a day or two. If closing above S&P 500 could extend a relief rally to resistance at 12,893.
A close below 11,488 and Nasdaq will resume down trend to test June lows.

 

Nasdaq 100 18 jul
Source: Saxo Group

USNAS100 cfd (Nasdaq 100 future) is trading around its 55 SMA. Strong resistance at around 12,227. A close above could push USNAS100 to 12,500-12,985. If it gets rejected at the resistance at 12,227 and drops back below 11,449 June lows are likely to be tested.

USNAS 100 d 18
Source: Saxo Group

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