Technical Analysis – CHI50 index remains positive; bulls falls short of the April 2019 high

Anthony Charalambous, XM Investment Research Desk

CHI50 stock index seems to have lost some momentum as sellers reversed the index back down to the previous peak of 14,068 from July 1. The rally from the low of 13,373, failed to reach the April 2019 high of 14,239, but persisting positive signals keep it intact.

The short-term oscillators reflect a stall in price. The MACD is deep in positive territory and has started to turn down, towards its red trigger line. The RSI, although having declined marginally below the 70-level, is above the trendline and is looking to re-enter the overbought territory. The upward sloping simple moving averages (SMAs) suggest that another push upwards cannot be ruled out.

If the 14,068 support holds and bulls pick up again, the price could move to re-test the April high of 14239. Surpassing this peak, the 14,331 level, which is the 138.2% Fibonacci extension of the down leg from 14,068 to 13,373 could apply downside pressure. Overtaking this level too, the 150.0% Fibo extension of 14,414 would draw traders’ attention.

To the downside, below the 14,068 level, initial support comes from the nearby low of 13,978. Steering the price lower, some hindrance could come from the 20-period SMA around 13,873 ahead of the support region between 13,814 and 13,758. Surpassing this, the converged 100- , 200- and 50-period SMAs residing in the area from 13,672 down to 13,643 may prove to be a significant barrier ahead of the swing low of 13,373.

In brief, a move above the 14,239 high would reinforce the short-term positive picture, while a shift below the 13,300 level would turn the bias neutral-to-bearish.