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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money. Losses can exceed deposits on some products.
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Top and reversal patterns in US stock Indices

Top and reversal patterns in US stock Indices

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Summary:  Saxo Bank's Kim Cramer Larsson takes a look at the charts and explains why the Dow looks ripe for correction and why the Nasdaq is flagging imbalance.

The Dow Jones Industrial Average Index has formed a Doji Evening formation. Coupled with RSI divergence and volume not having risen during the uptrend, the index is ripe for a correction. A correction that could take the Index down to its 55-day simple moving average  ie. around 25,700 but potentially down to the 200-day average around 25,000. 

For this reversal scenario to be busted, a close above the Doji ie. 26,488 is needed. 
Source: Saxo Bank 
Nasdaq 100

As mentioned during the morning call this morning the Nasdaq 100 has formed what looks like a rising wedge pattern. 

Markets have indeed been in a happy mood for most of 2019 but maybe things are starting to fade a bit. 
The Nasdaq 100 is now indicating RSI divergence ie. RSI is falling as the market has been rising, which is an indication of imbalance. The imbalance is also underlined by the fact that volume has been falling during the uptrend since the New Year.
Source: Saxo Bank

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, or any of our other products work, and whether you can afford to take the high risk of losing your money. The value of your investments can go down as well as up. Losses can exceed deposits on some margin products. Professional clients can lose more than they deposit. All trading carries risk.

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