Technical Analysis – US 100 Index’s boost dwindles as it looks for a new summit

Anthony Charalambous, XM Investment Research Desk

US 100 Index’s (Cash) recent appreciation, which bounced off the blue Kijun-sen line around 9,056, produced a fresh all-time high of 9,459. That said, the index appears to have taken a breather, something also reflected in the technical indicators, which display some wanings in positive momentum.

The MACD, although deep in the positive region and above its red trigger line, has lost steam, while the RSI is hovering below the 70 level. The Stochastics also warn of possible weakness in the positive picture as the %K line is attempting to cross below its %D line in the overbought zone. Nevertheless, all simple moving averages (SMAs) maintain an improving posture.

If buyers push north, immediate resistance could come from the 9,459 top ahead of the 9,750 obstacle. Surpassing this too, the 10,000 psychological barrier may prevent the index from stretching towards the 10,707 mark, which is the 261.8% Fibonacci extension of the retracement from 7,701 to 5,848.

Alternatively, driving below the 9,276 level, the red Tenkan-sen and blue Kijun-sen lines could apply some friction before the low of 8,918. Underneath, the 50-day SMA at 8,858 and Ichimoku cloud may interrupt the test of the support of 8,662. Moving lower, the inside swing high of 8,453 and 100-day SMA may follow, before the supportive trend line and key region of 8,166 to 8,034 – involving the 200-day SMA as well – apply the brakes to further losses.

Overall, the short-term bias maintains its bullish bias holding above the cloud, trendline, and 8,166 trough.