Technical Analysis – US 100 index’s positive sentiment intact despite stalling

Anthony Charalambous, XM Investment Research Desk

The US 100 stock index looks to have stalled after logging a fresh all-time high of 8,452.95, something also backed by the flat Tenkan-sen and Kijun-sen lines. That said, the price is trading above the Ichimoku cloud and the supportive trendline, suggesting that the positive outlook could endure.

The short-term oscillators reflect the stall in momentum but lean towards the positive picture. The RSI is hovering in bullish territory, while the MACD – in the positive zone – looks to move back above its red trigger line. Moreover, the upward sloping simple moving averages (SMAs) and the positive signals from the ADX aid further advances.

To the upside, moving off the 20-day SMA at 8,332, immediate resistance could come from the recent peak of 8,452.95. If buyers manage to conquer this high, the next line of resistance may be found at the 8,843 barrier, which is the 161.8% Fibonacci extension of the down leg from 7,701 to 5,848. If buyers persist, the index could climb to test the 176.4% Fibo extension at 9,118.

Alternatively, steering below the Ichimoku lines, the support region of 8,166 to 8,034, which encompasses the 50-day SMA could apply some upside pressure. Moving into the cloud, the 100-day SMA presently at 7,940 and neighboring supportive trendline could deny sellers additional declines. Under the cloud, the swing low of 7,800 and 200-day SMA underneath at 7,755 could challenge the bears’ attempts towards the troughs of 7,460 and 7,218.

Overall, a bullish bias continues to exist in the short- and medium-term. Yet, a break below the 7,800 low could shift the bias to a neutral one.