Technical Analysis – US 100 index rally loses steam
- US 100 index trades sideways, a tad below its all-time high
- It continues to battle with the August 5, 2024 trendline
- Momentum indicators are modestly bullish at this stage
The US 100 cash index is trading sideways today, moving in parallel with the August 5, 2024 ascending trendline. Market sentiment is modestly bullish but quite fragile, as risky markets are trying to adjust to the latest developments in active conflict regions and the tariffs announcements by President-elect Trump. Meanwhile, the bullish trend since the August 5 low needs a new higher high to remain valid.
The momentum indicators are somewhat bullish at this juncture. More specifically, the RSI is hovering a tad above its midpoint and thus pointing to some lingering bullish pressure. More importantly, the stochastic oscillator is edging towards its overbought area (OB), but it appears to lack the momentum that resulted in the November 11, 2024 all-time high. Interestingly, the Average Directional Movement Index (ADX) is not convinced of the current movement, as it is hovering below its midpoint and thus signalling a trendless market.
Should the bulls remain confident, they could try to keep the US 100 index above the 20,683-20,772 area, and gradually push it higher towards 21,231. If successful, the door would then be wide open to a new all-time high, with the 21,500 level being the first target. Even higher, the 200% Fibonacci extension level of the November 22, 2021 – October 13, 2022 downtrend is positioned just north of 23,000.
If the bears manage to regain the reins, they could try to push the US 100 index below the busy 20,683-20,772 region, which is populated by the 161.8% Fibonacci extension level, the July 11, 2024 high and the August 5, 2024 and October 26, 2023 ascending trendlines. A move below this busy area could tip the balance in favour of the bears, potentially allowing them to test the support set by the 50- and 100-day simple moving averages (SMAs) at 20,345 and 19,792 respectively.
To sum up, the US 100 index is on a gentle upwards move, but momentum is fragile ahead of some key US data releases and a relatively quieter week due to the Thanksgiving holiday.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
