Technical Analysis – US 30 index bears dominate, keeping descent intact

The US 30 stock index’s (Cash) bearish outlook appears to be unwavering as the price continues to plot lower highs and lows. The diving 50- and 100-period SMAs and their bearish crossovers of the 200-period SMA is signalling that the retracement in the index from the all-time high of 35,562 may have some ways to go before buyers find their feet. The negative bearing has the upper hand as long as the price remains below the 35,000 handle, despite the current increase in buying interest.

The Ichimoku lines are indicating a pause in negative forces, while the short-term oscillators are endorsing the minor upside reversal in the price from the 33,951 level. The MACD, far below the zero threshold, has nudged above its red trigger line, while the RSI is improving in bearish territory, both promoting fading of negative momentum. The positively charged stochastic oscillator is signalling persisting bullish price action.

If buyers continue to push back, the blue Kijun-sen could impede gains from extending towards the 35,000 mark. In the event the index appreciates above the 35,000 level, the bulls may encounter the Ichimoku cloud and a resistance section from the 50-period SMA at 35,187 until the 35,300 high. Overhead lingers another resistance border of 35,405-35,495, where the index may struggle to reinstate its bullish tone.

If the negative trajectory endures and the price slips back beneath the 34,426 level, support could commence around the intraday low ahead of the eight-week low of 33,951. Dipping past this, the 33,815 support, linked to the lows in the beginning of October, may attempt to impede the descent from gaining pace. Should this barricade fail to halt the decline, the key three-and-a-half-month trough of 33,518 may draw traders’ attention. A break of this critical trough could trigger concerns of a prolonged decline in the index. Beneath this lies another key level at 33,117, which if violated, could cement this viewpoint.

Summarizing, the US 30 index’s broader bullish bias is at risk below the critical 33,518 trough and 33,117 level.

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