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 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 is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, 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 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 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 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 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 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/en-sg/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region

Singapore
Singapore

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.