Technical Analyst, Saxo Bank Group
Summary: Nasdaq continuing higher confirming uptrend and is eyeing 13K and beyond.
S&P 500 above 4K testing short-term falling trendline. Could confirm uptrend in coming days
Big Cap Dow Jones and Small Cap Russell 2000 bounced off strong support but upside seems limited short-term
Including US500 and USNAS100 levels
S&P 500 has retraced 50% of the February bearish market to touch the short-term falling trendline yesterday. The Index closed above 4K and above the 55 daily MA, and is back in the cloud. RSI is still showing negative sentiment but could reverse that picture if S&P 500 moves higher next couple of days.
An Index close above the falling trend and above the cloud could give bulls more energy to lift the Index higher.
Resistance at around 4,048. A close above 4,079 will confirm uptrend that is likely to take S&P 500 to February peak around 4,200. A close below 3,900 will reverse this likely bullish scenario.
US500 cfd closed yesterday above the falling trendline. Testing it from the upper side today. If dropping back below 3,900 downtrend is likely to resume
Nasdaq 100 pushing higher and has taken out 0.786 retracement at 12,627. 13K is in sight. If Nasdaq 100 closes above February peak at 12,881 there is no strong resistance at around 13,687 close to the 1.618 projection of the February correction. First target after a close above 12,881 is likely to be the 1.382 projection at around 13,333.
RSI is positive with no divergence supporting the bullish view. To reverse this bullish picture a close below 12,407 is needed fort a test of the short-term falling trendline.
Dow Jones Index bounced from the support at around 31,738 to the 0.382 retracement and resistance at around 32,573. A close above is likely to pave the way to 0.618 retracement at around 33,233 where the 55 and 100 daily MA’s will adding resistance. RSI is still negative but has broken above its falling trendline. There is no divergence however, so of RSI breaks back below 40 threshold it is an indication of lower levels in the Index is coming.
If Dow Jones closes below 31,738 the down trend is likely to be extended below 31K with strong support at around 30,192
Russell 2000 Smal Cap Index has bounced from strong support at around 1,722. RSI divergence indicates there could be further upside possibly to test the strong resistance around 1,825.
A close below 1,722 is likely to lead to a sell-off down to 1,653
RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend
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