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Stock Indices Weekly Technical Outlook: Bullish Exhaustion Signals Detected At Major Risk Zones

S&P 500 – Bullish exhaustion seen at major risk zone


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Key Levels (1 to 3 weeks)

Pivot (key resistance): 3120

Supports: 3060 (trigger), 3018 & 2955

Next resistance: 3190/220

Directional Bias (1 to 3 weeks)

Last week, the SP 500 Index (proxy for the S&P 500 futures) has pushed higher towards the 3120 key medium-term pivotal resistance as per highlighted in our previous report (click here  for a recap). It printed an intraday high of 3098 on last Thurs, 07 Nov and ended the week with bullish exhaustion signals.

Maintain bearish bias below 3120 and added 3060 as the downside trigger level to reinforce the start of a potential corrective decline to target the next supports at 3018 follow by 2955 in the first step.

On the other hand, a clearance with a daily close above 3120 invalidates the bearish scenario for a further squeeze up towards the next resistance 3190/220 (Fibonacci expansion cluster).

Key elements

  • The Index has formed a weekly “Star” candlestick pattern after 4 weeks of consecutive higher closes since 03 Oct 2019 low. This observation suggest that the bulls are now getting indecisive.      
  • The daily RSI oscillator has almost reached an extreme overbought level at 73 coupled with a bearish divergence seen in the 4-hour Stochastic oscillator at its overbought region as price action of Index has continued to display “higher highs”. These observations suggest that upside momentum of the medium-term up move since 03 Oct 2019 low has started to wane.
  • 30060 downside trigger level is defined by the pull-back support of the former major “Expanding Wedge” range resistance (see daily chart).

Nikkei 225 – Tolerate the excess resistance to 23650



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Key Levels (1 to 3 weeks)

Pivot (key resistance): 23450/23650 (excess)

Support: 22260 (trigger) & 22420/170

Next resistance: 24400

Directional Bias (1 to 3 weeks)

Last week, the Japan 225 Index (proxy for the Nikkei 225 futures) has staged a further push to pierce above the 23450 key medium-term pivotal resistance on Thurs, 07 Nov (printed an intraday high of 23652) before it inched lower back below 23450 on Fri, 08 Nov.

No strong conviction to justify a bullish break above 23450, maintain bearish bias and tolerate the excess pivotal resistance to 23650 and added 22260 as the downside trigger level to reinforce a potential corrective decline towards the 22420/170 support.

On the other hand, a clearance with a daily close above 23650 invalidates the bearish scenario for an extension of the up move towards the next resistance at 24400 (01 Oct 2018 major swing high area).

Key elements

  • Even though the price action of Index has broken above the upper boundary of a major ascending range in place since 26 Dec 2018 low, but upside momentum has appeared to be waning. Bearish divergences can be seen in the daily RSI and 4-hour Stochastic oscillators at their respective overbought regions.
  • Last Fri, 08 Nov price action retreat below 23450 has taken place right at the upper boundary of a medium-term ascending channel in place since 26 Aug 2019 low which also coincides with the 0.764 Fibonacci expansion of the recent up move from 03 Oct low to 17 Oct high projected from 19 Oct 2019 low (see 4-hour chart).
  • The 22420/170 support is defined by the former swing high areas of 19/26 Sep 2019, the lower boundary of the medium-term ascending channel from 26 Aug 2019 low and the 38.2% Fibonacci retracement of the up move from 26 Aug low to 07 Nov 2019 high.

Hang Seng – At risk of kickstarting a corrective decline within a major range configuration



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Key Levels (1 to 3 weeks)

Intermediate resistance: 27600

Pivot (key resistance): 28000

Supports: 26500 & 26100

Next resistance: 29000

Directional Bias (1 to 3 weeks)

Last week, the Hong Kong 50 Index (proxy for Hang Seng Index futures) has staged the expected extended corrective push up and almost hit the target/resistance of 28100/200 as per highlighted in our previous report (printed an intraday high of 27923 on 07 Nov).

Elements have turned negative, flip back to a bearish bias below 28000 key medium-term pivotal resistance for a further potential corrective decline to target 26500 follow by the medium-term ascending range support at 26100.

On the other hand, a clearance with a daily close above 28000 invalidates the bearish scenario for an extension of the corrective up move towards the next resistance at 29000 (the major descending trendline from its 29 Jan 2018 all-time high level, 02 Jul 2019 swing high & 76.4% Fibonacci retracement of the previous decline from 03 May high to 15 Aug 2019 low.

Key elements

  • Since 26 Oct 2018 low, the Index has been evolving within a complex range configuration with its lower limit/support at 24870/500 and upper limit/resistance at 29000.
  • At the start of today, 11 Nov Asia session, the Index has staged an intraday bearish breakdown below its intermediate support at 27350 (the former swing high area of 13 Sep 2019).
  • The 4-hour Stochastic oscillator has almost reached an extreme oversold level, thus the Index may see a bounce back first towards the intraday breakdown of 27350/27600 (the gapped down seen in today’s Asian opening session).

ASX 200 – 6780 remains the key resistance to watch

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Key Levels (1 to 3 weeks)

Pivot (key resistance): 6780

Supports: 6660, 6610 & 6500

Next resistance: 6878

Directional Bias (1 to 3 weeks)

No major changes on its key elements. Maintain bearish bias below 6780 key medium-term pivotal and a break below 6660 reinforces a further potential push down towards 6610 before targeting the 6500 “Expanding Wedge” range support in place since 27 Mar 2019 low.

On the other hand, a clearance with a daily close above 6780 invalidates the bearish tone for a squeeze up to retest the 30 Jul 2019 swing high/all-time high area of 6878.

DAX – Tolerate the excess resistance to 13350



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Key Levels (1 to 3 weeks)

Pivot (key resistance): 13200/350 (excess)

Supports: 13110 (trigger), 12800 & 12600/500

Next resistance: 13600 (all-time high)/750

Directional Bias (1 to 3 weeks)

Last week, the Germany 30 Index (proxy for the DAX futures) has pushed higher to challenge the 13200 key medium-term pivotal resistance as per highlighted in our previous report (printed an intraday high of 13302 on last Thurs, 08 Nov).

Current elements are not convincing to advocate an extension of the rally, maintain bearish bias below 13350 (excess) key medium-term pivotal resistance and added a downside trigger level at 13110 to reinforce the start of a potential corrective decline to target the next supports at 12800 and 12600/500 in the first step.

On the other hand, a clearance with a daily close above 13350 sees an extension of the up move to test the current all-time high level of 13600/750 (Fibonacci expansion cluster).

Key elements

  • The 17% rally from its 15 Aug 2019 swing low area of 11300 has reached the upper boundary of a major ascending channel in place since 26 Dec 2018 now acting as a resistance at 13350 which also confluences with a Fibonacci expansion cluster that increases the odds of a corrective decline at this juncture.
  • In conjunction, the daily RSI oscillator has almost reached an extreme overbought level of 82 coupled with a bearish divergence seen in the 4-hour Stochastic oscillator. These observations suggest that the upside momentum of the medium-term up move from 15 Aug 2019 low has started to ease.
  • The 13110 downside trigger level is defined by the minor swing low of 05 Nov 2019 and the pull-back support of the former medium-term ascending channel resistance from 15 Aug 2019 low.

Charts are from in-house platform  & eSignal  


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