Technical Update - Can rebound in US Equities extend much further? S&P 500 and Nasdaq 100
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Rebound in US Equities seems to continue. However, there are some indications it will not last much longer.
RSI still below 60 – needs to break above for bullish sentiment. RSI on all US indices has been showing Divergence which “warned” about this correction. The Divergence needs to be “traded out” either by a close above 60 or a new low.
There are also some overhead resistances and volume has been declining during this rebound which is a sign of weakness.
S&P 500 strong resistance at 4,300. 55 and 100 SMA declining also provide some resistance. The Index could also face some resistance at the 0.618 Fibonacci retracement level at 4,245
If S&P 500 closes above 4,300 4,500 is next. A daily close below 4,073 sellers are likely to regain control.
Medium-term trend is down. 3,815 is the key support to look out for. RSI bearish and no divergence support the bearish outlook.
Nasdaq 100 is close to test the 13K resistance level. A daily close above could see the Index to continue correction to strong and key resistance at 13,543.
A close below 12,287, thereby closing the gap from last week, sellers are likely to get a second wind sending the Index to test May lows.
The medium-term trend is still down. On weekly there is no RSI divergence indicating lower levels are likely after a correction.
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