Weekly Technical Outlook on Major Stock Indices Bulls at risk of topping out in the medium term
Your weekly dose of key technical charts on S&P 500, Nikkei 225, Hang Seng, ASX 200 & DAX.
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S&P 500 – Watch the key medium-term resistance of 3045/55
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Key Levels (1 to 3 weeks)
Pivot (key resistance): 3045/55
Supports: 2980 (trigger) & 2910/04
Next resistance: 3080 (Fibonacci expansion)
Medium-term (1 to 3 weeks) Outlook
The SP 500 Index (proxy for the S&P 500 futures) has surged upwards as expected and cleared above the first medium-term upside target/resistance of 3003. Last Fri, 12 Jul it has made another push up and ended the week with another fresh all-time high close of 3013. Around 1% away from the medium-term upside target/resistance of 3045 as per highlighted in our previous weekly outlook report (click here for a recap).
Price action of the Index are coming close to the graphical resistances of a “topping” configuration; the upper boundary of the impending major “Expanding Wedge” in place since Jan 2018 and the upper boundary of a medium-term “Ascending Wedge” from 13 Jun 2019. Both upper boundaries confluence at 3045.
In addition, the daily RSI oscillator is coming close to an extreme overbought level of 73 since Aug 2018. Elliot Wave/fractal analysis suggests that the Index may be undergoing a residual push up to complete the primary degree impulsive up move sequence in place since Dec 2018 low with a potential end target zone of 3045/55 (Fibonacci projection cluster).
Therefore, we flip to a bearish bias in any push up below the 3055 key medium-term pivotal resistance and a break below 2980 (the “Ascending Wedge” support) is likely to kickstart a potential corrective down move sequence towards 2910/04 in the first step.
On the other hand, a clearance above 3055 sees a further squeeze up towards 3080 (Fibonacci projection).
Nikkei 225 – Residual push up above 21500 (low conviction)
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Key Levels (1 to 3 weeks)
Pivot (key support): 21500
Resistance: 21900/22000
Next support: 20900/800
Medium-term (1 to 3 weeks) Outlook
The Japan 225 Index (proxy for the Nikkei 225 futures) has traded sideways last week. We maintain the bullish bias with an adjusted key medium-term pivotal support now at 21500 for a potential residual push up to target the 219000/22000 resistance (Fibonacci retracement/projection cluster & upper boundary of the “Ascending Wedge” from 04 Jun 2019 low).
On the other hand, a break with a daily close below 21500 invalidates the residual push up scenario to kickstart the multi-week corrective down move sequence towards the next support at 20900/800 in the first step.
Hang Seng – Residual push up in progress (low conviction)
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Key Levels (1 to 3 weeks)
Intermediate support: 28300
Pivot (key support): 28000
Resistances: 29000 & 29500
Next support: 26700
Medium-term (1 to 3 weeks) Outlook
The decline in price action of the Hong Kong 50 Index (proxy for Hang Seng Index futures) has managed to stall right above the 28000 key medium-term pivotal support on both occasions; last Tues, 09 Jul and today’s 15 Jul Asian session.
We maintain the bullish bias for a residual push up to retest 29000 before targeting the next resistance at 29500 (Fibonacci retracement/projection cluster & upper boundary of the “Ascending Wedge” from 04 Jun 2019 low).
On the other hand, a break with a daily close below 28000 invalidates the residual push up scenario to kick start the multi-week corrective decline towards the next support at 26700 in the first step.
ASX 200 – Residual push up to retest all-time high
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Key Levels (1 to 3 weeks)
Intermediate support: 6660
Pivot (key support): 6590
Resistance: 6815/6850
Next support: 6380
Medium-term (1 to 3 weeks) Outlook
The Australia 200 Index (proxy for the ASX 200 futures) has traded sideways after a test on its intermediate support at 6660. No change on its key elements, we maintain the bullish bias with 6590 remains as the key medium-term pivotal support for a potential residual push up to target the next resistance zone at 6815/50 (all-time high & Fibonacci expansion cluster).
On the other hand, a break with a daily close below 6590 invalidates the bullish scenario to kick start the multi-week corrective down move sequence towards the next support at 6380.
DAX – Start of potential multi-week corrective down move
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Key Levels (1 to 3 weeks)
Pivot (key resistance): 12500
Supports: 12200 (trigger) & 11900/800
Next resistance: 12800 (Fibonacci expansion/retracement cluster)
Medium-term (1 to 3 weeks) Outlook
The Germany 30 Index (proxy for the DAX futures) has failed to hold the 12400 key medium-term support and staged a bearish breakdown below the “Ascending Wedge” support in place since 03 Jun 2019 low.
Therefore, the residual push up scenario has been invalidated. We flip to a bearish bias below the 12500 key medium-term pivotal resistance and a break below 12200 is likely to kickstart a potential multi-week corrective down move sequence to target the major support zone of 11900/800.
On the other hand, a clearance with a daily close above 12500 invalidates the bearish scenario for a revival of bulls to set sight on the next resistance at 12800.
S&P 500 – Watch the key medium-term resistance of 3045/55
click to enlarge charts
Key Levels (1 to 3 weeks)
Pivot (key resistance): 3045/55
Supports: 2980 (trigger) & 2910/04
Next resistance: 3080 (Fibonacci expansion)
Medium-term (1 to 3 weeks) Outlook
The SP 500 Index (proxy for the S&P 500 futures) has surged upwards as expected and cleared above the first medium-term upside target/resistance of 3003. Last Fri, 12 Jul it has made another push up and ended the week with another fresh all-time high close of 3013. Around 1% away from the medium-term upside target/resistance of 3045 as per highlighted in our previous weekly outlook report (click here for a recap).
Price action of the Index are coming close to the graphical resistances of a “topping” configuration; the upper boundary of the impending major “Expanding Wedge” in place since Jan 2018 and the upper boundary of a medium-term “Ascending Wedge” from 13 Jun 2019. Both upper boundaries confluence at 3045.
In addition, the daily RSI oscillator is coming close to an extreme overbought level of 73 since Aug 2018. Elliot Wave/fractal analysis suggests that the Index may be undergoing a residual push up to complete the primary degree impulsive up move sequence in place since Dec 2018 low with a potential end target zone of 3045/55 (Fibonacci projection cluster).
Therefore, we flip to a bearish bias in any push up below the 3055 key medium-term pivotal resistance and a break below 2980 (the “Ascending Wedge” support) is likely to kickstart a potential corrective down move sequence towards 2910/04 in the first step.
On the other hand, a clearance above 3055 sees a further squeeze up towards 3080 (Fibonacci projection).
Nikkei 225 – Residual push up above 21500 (low conviction)
click to enlarge charts
Key Levels (1 to 3 weeks)
Pivot (key support): 21500
Resistance: 21900/22000
Next support: 20900/800
Medium-term (1 to 3 weeks) Outlook
The Japan 225 Index (proxy for the Nikkei 225 futures) has traded sideways last week. We maintain the bullish bias with an adjusted key medium-term pivotal support now at 21500 for a potential residual push up to target the 219000/22000 resistance (Fibonacci retracement/projection cluster & upper boundary of the “Ascending Wedge” from 04 Jun 2019 low).
On the other hand, a break with a daily close below 21500 invalidates the residual push up scenario to kickstart the multi-week corrective down move sequence towards the next support at 20900/800 in the first step.
Hang Seng – Residual push up in progress (low conviction)
click to enlarge charts
Key Levels (1 to 3 weeks)
Intermediate support: 28300
Pivot (key support): 28000
Resistances: 29000 & 29500
Next support: 26700
Medium-term (1 to 3 weeks) Outlook
The decline in price action of the Hong Kong 50 Index (proxy for Hang Seng Index futures) has managed to stall right above the 28000 key medium-term pivotal support on both occasions; last Tues, 09 Jul and today’s 15 Jul Asian session.
We maintain the bullish bias for a residual push up to retest 29000 before targeting the next resistance at 29500 (Fibonacci retracement/projection cluster & upper boundary of the “Ascending Wedge” from 04 Jun 2019 low).
On the other hand, a break with a daily close below 28000 invalidates the residual push up scenario to kick start the multi-week corrective decline towards the next support at 26700 in the first step.
ASX 200 – Residual push up to retest all-time high
click to enlarge charts
Key Levels (1 to 3 weeks)
Intermediate support: 6660
Pivot (key support): 6590
Resistance: 6815/6850
Next support: 6380
Medium-term (1 to 3 weeks) Outlook
The Australia 200 Index (proxy for the ASX 200 futures) has traded sideways after a test on its intermediate support at 6660. No change on its key elements, we maintain the bullish bias with 6590 remains as the key medium-term pivotal support for a potential residual push up to target the next resistance zone at 6815/50 (all-time high & Fibonacci expansion cluster).
On the other hand, a break with a daily close below 6590 invalidates the bullish scenario to kick start the multi-week corrective down move sequence towards the next support at 6380.
DAX – Start of potential multi-week corrective down move
click to enlarge charts
Key Levels (1 to 3 weeks)
Pivot (key resistance): 12500
Supports: 12200 (trigger) & 11900/800
Next resistance: 12800 (Fibonacci expansion/retracement cluster)
Medium-term (1 to 3 weeks) Outlook
The Germany 30 Index (proxy for the DAX futures) has failed to hold the 12400 key medium-term support and staged a bearish breakdown below the “Ascending Wedge” support in place since 03 Jun 2019 low.
Therefore, the residual push up scenario has been invalidated. We flip to a bearish bias below the 12500 key medium-term pivotal resistance and a break below 12200 is likely to kickstart a potential multi-week corrective down move sequence to target the major support zone of 11900/800.
On the other hand, a clearance with a daily close above 12500 invalidates the bearish scenario for a revival of bulls to set sight on the next resistance at 12800.
Charts are from City Index Advantage TraderPro
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