Technical Technical Technical

Technical Update - S&P 500 and Nasdaq: Is the rebound just a bull trap or a return to Bull market

Equity 5 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

S&P 500 closed the gap last week, jumped to next resistance, closed above that one and is now set for test of next at 4,177. Expect a minor correction from that resistance level before uptrend resumes to test 4,300. Rising volume and positive RSI without divergence support the short-term bullish picture
With the 200 SMA and medium-term falling trend line coming down around 4,300 that level should be considered to be a strong resistance level. providing resistance.
For S&P 500 to reverse its uptrend a close below 3,910.

Source: Saxo Group

Weekly chart S&P 500 is trading in a wide falling channel close to break bullish out of. However, even if S&P 500 breaks above 4,300 August is going to be a very interesting month. If S&P 500 closes the month below 4,164 medium- to long-term bear trend is likely to resume and the current uptrend would merely just be a Bull trap. Watch out for where RSI is at then end of August; has is closed above or below 60 on the weekly time period at any time during the month of August? If rejected bear trend is likely to resume.

Source: Saxo Group

Nasdaq 100 closed above key resistance at around 12,897. The uptrend is supported by rising volume and higher RSI values without divergence, the Index is set for higher levels short term. Next resistance is around 13,566-13,650
A close below 12,051 will reverse the short-term uptrend.

Source: Saxo Group

Nasdaq 100 is testing medium-term falling trendline. A weekly close above there is room for higher levels.
RSI has broken its falling trend and if it closes above 60 it has turned bullish. However, 55 SMA is declining i.e. underlying medium-trend is bearish. This relief rally could merely just be a Bull trap. Keep your stops close and be disciplined.

Source: Saxo Group

With a Bullish Engulfing candle in July the Monthly chart supports the bottom and reversal scenario currently unfolding. A reversal that could take Nasdaq 100 to 13,650 possibly testing 14K. However, the divergence on RSI has not yet been “traded out i.e. bear trend is still likely to resume after a strong relief rally/Bull trap correction. Divergence on RSI either needs to close below 40 or make a new high to be reset.

Source: Saxo Group
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.