Technical Analysis – US 500 capped by 50-day SMA and Ichimoku cloud


Melina Deltas, XM Investment Research Desk

The US 500 index rebounded on the 3,200 handle and the 100-day simple moving average (SMA), shifting back to the upside. Currently, the price found resistance at the 50-day SMA and the upper surface of the Ichimoku cloud, while the red Tenkan-sen and the blue Kijun-sen line are moving horizontally. The MACD and the RSI are also heading sideways failing to support the upside movement.

To the upside, emanating pressure over the last couple of days has denied upside moves. If buyers manage to jump above the 50-day SMA, a revisit of the all-time high of 3,588.24 could unfold. Overcoming these constrictions could see resistance develop at the 3,819 barrier, which is the 161.8% Fibonacci extension level of the down leg from 3,588.24 to 3,200.

Otherwise, if sellers drive the pair below the cloud, the 23.6% Fibonacci retracement level of the upward wave from 2,183.95 to 3,588.24 at 3,260. In the event selling interest persists, the key support region of 3,200 and the 3,110 level, which overlaps with the 200-day SMA could halt the decline. Should it fail to do so, the 38.2% Fibonacci of 3,053 could challenge the bears before the price sinks towards 2,941.

Summarizing, in the long-term window, the US 500 index has been in a strong bullish tendency without any significant bearish actions over the last six months.