Post Preview

  • US 100 heads up, standing beneath short-term rising trend line

  • Stochastics point north above oversold region

  • RSI ticks higher below 50 level

The US 100 (cash) index had a strong pullback off the 18,715 support, failing to extend its dive from the all-time high of 20,775 below the long-term ascending trend line.

Technically, the stochastic oscillator is moving up following the bullish crossover within its %K and %D lines in the oversold zone, while the RSI is ticking slightly up beneath the neutral threshold of 50. Also, the 20- and 50-day simple moving averages (SMAs) are heading down, approaching the current market price.

If traders continue to buy the index, then the 50-day SMA near 19,470 resistance would be the first obstacle to look for ahead of the 20-day SMA at 19,875. A break above this level would shift the short-term outlook back to positive, taking the price above the near-term uptrend line at 20,120.

In the event of a downside reversal and a closing session below the long-term ascending trend line, near the 18,715 support, could open the way for a downside tendency, hitting 18,190. A strong barrier, though, could be found at the 200-day SMA at 17,690.

In the bigger picture, the US 100 index is bullish as long as it holds above the 200-day SMA. If it violates this line, the bears would probably take the upper hand.