Technical Analysis – US 30 index consolidates around all-time high

Anthony Charalambous, XM Investment Research Desk

The US 30 stock index (Cash) has stalled around its all-time high of 31,543 after its latest impressive rally from the 29,659 trough. The flattening Ichimoku lines are reflecting the stalling in the ascent, while the soaring 50-period simple moving average (SMA) and its recent bullish crossovers of the climbing 100- and 200-period SMAs is promoting additional price gains into uncharted waters.

The short-term oscillators are reflecting mixed signals in directional momentum. The MACD, in the positive region, is weakening below its red trigger line, while the RSI is trying to gain ground in bullish territory. The stochastic %K line is also endorsing strength in the index as it pushes over the 80 level.

To the upside, if buyers overstep the all-time high of 31,543, the index could encounter its next resistance at the 31,650 level, which happens to be the 123.6% Fibonacci extension of the down leg from 31,284 until 29,659. Should further rallies unfold, the price could extend towards the 138.2% Fibo extension of 31,885.

If sellers steer the price down, initial support could develop from the Ichimoku lines at 31,382 and 31,306 respectively ahead of the key trough of 31,217. From here, if a deeper retracement occurs, the cloud’s upper surface and the 50-period SMA at 31,050 could attempt to obstruct further losses towards the 100- and 200-period SMA at 30,815 and 30,820.

Summarizing, the index retains a short-term positive tone above the SMAs and the 31,217 trough.