With the Average Directional Movement Index (ADX) stuck well below its 25-threshold, the onus falls on the stochastic oscillator to signal the next move. It is hovering inside its overbought area and above its moving average (MA). A break below both these levels would constitute a bearish sign. In addition, a muted bearish divergence is forming as the higher high seen at the index has been met by a lower high at the stochastic indicator.

Should the bears feel encouraged by these muted signals, they would try to push the index below the 13,206 level again. They would then come up against the busy 12,858-12,888 area defined by the 38.2% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend, the September 13, 2022 high and the 50-day simple moving average (SMA). The next support area would come at the 12,379-12,465 range, set by the September 2, 2020 high and the 100-day simple moving average (SMA) respectively.

On the other hand, if the bulls feel confident, they would set their eye on the key 13,600-13,721 area. This is populated by the August 16, 2022 high and the 50% Fibonacci retracement. Even higher, the April 29, 2021 high of 14,075 looks critical from a long-term perspective.