Technical Update - Rebound in S&P 500 and Nasdaq could have more legs to run but down trend could quickly resume
Kim Cramer Larsson
Technical Analyst, Saxo Bank
S&P 500 bounced from the 0.618 retracement at and support at around 3,900 closing yesterday at the 55 Simple Moving Average (SMA). Further upside should be expected before down trend is likely to resume.
0.382 retracement of the past few weeks of sell off at around 4,054 is likely to be reached but a move to 4,054 - 4,100 is not unlikely.
RSI is still bearish with no divergence indicating lower levels are likely after this corrective rebound.
To reverse the down trend a close above 4,200 is needed.
Nasdaq 100 closed below the 0.618 retracement and support at around 12,046 only to bounce strongly the following day. A few more days of rebound to around 12,613 should be expected but a move towards 13K is not out of the question. However, with RSI showing negative sentiment and no divergence down trend is likely to resume. To reverse this current down trend a close above 13,175 is needed.
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