Technical Analysis – US 30 index unable to log new record high, pulls back

Marios Hadjikyriacos, XM Investment Research Desk

The US 30 index came close to challenging its all-time high of 27,402 earlier this month, but did not quite reach that level, and subsequently pulled back. The inability of the bulls to log a new high reaffirms that the index is in a sideways market, with a push either above 27,402 or below 25,280 needed to change this neutral picture.  

Momentum oscillators confirm the lack of direction, with the RSI being relatively flat near its neutral 50 line, and the MACD being below its red trigger line but in positive territory.

If the latest pullback continues, initial support may come from the 26,700 area, where the 50-day simple moving average (SMA) is also roughly located – at 26,560. A downside break would pave the way for a test of the 200-day SMA at 25,830. Even lower, the 25,280 territory could be a stronger barrier – but if sellers violate this area too, that would turn the outlook to negative.

On the upside, a successful push above the record high of 27,402 would bring the market into uncharted waters, turning the focus to psychological round levels for resistance, such as 28,000 and 28,500 initially.

Summarizing, a move above 27,402 would turn the picture back to positive, whereas a clear break below 25,280 would turn it negative.