Technical Analysis – US 500 reaches five-month high; looks strongly bullish

Christina Parthenidou, XM Investment Research Desk

The US 500 cash index reached another five-month high of 3,280.72 earlier today as the index extended its four-month bull run. Prices broke above the 3,230 level and are trading above their moving averages. The bullish picture in the medium-term is further supported by the MACD, which is rising above its trigger line, while the RSI is edging towards the overbought level.

Should prices reverse lower, immediate support could come at 3,230 and the 3,110 barrier. Below that, the 23.6% Fibonacci retracement level of the upward move from 2,183.95 to 3,280.72 at 3,023 could be another major support. A drop below this area would take the index closer to the 200-day simple moving average (SMA) at 2,902 ahead of the 38.2% Fibo of 2,862.

To the upside, there is immediate resistance at today’s intraday’s high of 3,280.72, while above that, the next crucial resistance to watch is the all-time high of 3,396.64.

To sum up, the index has been in a strong bullish structure after the pullback on the 39-month low of 2,183.95 and the long-term outlook could become strongly positive too if the price surpasses the previous record top.