Technical Update - Uptrends likely to have exhausted for Nasdaq 100, SP 500 and Dow Jones Indices Technical Update - Uptrends likely to have exhausted for Nasdaq 100, SP 500 and Dow Jones Indices Technical Update - Uptrends likely to have exhausted for Nasdaq 100, SP 500 and Dow Jones Indices

Technical Update - Uptrends likely to have exhausted for Nasdaq 100, SP 500 and Dow Jones Indices

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

  • Top and reversal patterns, along with technical indicators, are strongly indicating that the uptrends in Nasdaq 100, S&P 500, and Dow Jones have come to an end, at least in the short term, suggesting an impending correction

  • Nasdaq 100 Bear Engulfing pattern was not cancelled and sellers now seem to be in control. Key support at 17,808 could be tested shortly.
    USNAS100 CFD support at 17,780

  • S&P 500 rejected twice at 5,261. Key support at 5,057
    US500 CFD support at 5,048

  • Dow Jones Minor double top confirmed. Short-term downside potential to 38,457.
    US30 CFD support at 38,450
Nasdaq 100 

As highlighted in previous technical updates, the Nasdaq 100 formed a bearish engulfing top and reversal pattern on 8th March. This pattern has not been cancelled and remains in play, despite the fact that the reversal has not yet unfolded.

RSI has been signaling trend exhaustion by showing divergence for some time, and with the recent gap lower, the reversal might now be commencing.
A test of key strong support at around 17,808 is likely. A daily close below this level could lead to further selling, potentially down to around 17,478.

For the Nasdaq 100 to negate the top and reversal pattern, a daily close above 18,417 is required. If that scenario plays out, although it appears unlikely, there is short-term upside potential to 18,812, which corresponds to the 1.618 projection of the sideways trading range observed over the past few weeks.

Source all charts and data: Saxo Group

USNAS100 CFD levels: Key strong support at around 17,780. Could be tested shortly. A break below could push USNAS100 lower to 17,315-17,160

To resume uptrend a close above 18,417 is needed

The S&P 500 has been rejected at its previous peak of 5,261 twice. RSI has been signaling uptrend exhaustion for quite some time.
With the index closing yesterday below its lower rising trendline, a correction scenario is likely to unfold.

Key strong support at around 5,057 could be tested. A daily close below this level is likely to fuel a sell-off down to around 4,845, which is close to the 0.382 retracement of the uptrend since October 2023 at 3,819.

To negate this top and reversal scenario, a daily close above 5,261 is necessary. If that occurs, the S&P 500 could push higher to around 5,483

US500 CFD levels:  Currently trading below lower rising trendline. Key strong support at 5,048. Minor support at 5,148.
Strong support at around 4,953-4,919 and 4,841.
A close above 5,277 uptrend is to be extended with potential to around 5,480

The Dow Jones Industrial Index has formed a short-term, minor double-top pattern. With the close yesterday below 39,277, the top and reversal pattern is confirmed, with potential to test key support at around 38,457. A close below that level is likely to fuel a sell-off down to support at around 37,778.

To negate this reversal pattern and resume the uptrend, a close above 39,889 is necessary.

US30 CFD levels: Support at 38,450 and 37,778. A daily close above 39,988 will demolish the top and reversal pattern.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.