Top Story

Weekly Technical Outlook on Stock Indices: Uptrending within a wall of worry

S&P 500 – Bullish break from range



click to enlarge charts

Key Levels (1 to 3 weeks)

Pivot (key support): 2940

Resistances: 3028 (all-time high) & 3055/70

Next support: 2820

Directional Bias (1 to 3 weeks)

The SP 500 Index (proxy for the S&P 500 futures) has broken above the 2941 upper limit/resistance of a 4-week range configuration in place since 06 Aug 2019 that has invalidated the preferred multi-week bearish bias (click here for a recap).

Flip to a bullish bias in any dips above 2940 key medium-term pivotal support for a further potential push up to retest the current all-time high of 3028 before targeting the next resistance at 3055/70 within a major bearish ‘Expanding Wedge” configuration in place since 26 Jan 2018.

On the other hand, a daily close below 2940 indicates a failure bullish breakout to see another round of choppy decline towards the 2820 support (lower boundary of an ascending range since 03 Jan 2019).

Key elements

  • The daily RSI oscillator has broken above a significant corresponding descending resistance that suggests a revival of medium-term upside momentum.
  • The next medium-term significant resistance stands at 3055/70 which is defined by the intersection of the (upper boundaries of the “Expanding Wedge” from 26 Jan 2018 & ascending range from 03 Jan 2019), the upper boundary of a minor ascending channel from 26 Aug 2019 and a Fibonacci expansion cluster.

Hang Seng – Breaking above 26700



click to enlarge charts

Key Levels (1 to 3 weeks)

Pivot (key support): 26290

Resistance: 28000

Next support: 24870/500

Directional Bias (1 to 3 weeks)

The Hong Kong 50 Index (proxy for Hang Seng Index futures) has started to stage an attempt to break above 26700 (the former 05 Jun 2019 medium-term swing low) with a positive observation seen in the daily RSI oscillator that has staged a bullish breakout from a corresponding descending resistance.

Flip to a bullish bias in any dips above the 26290 key medium-term pivotal support for a mean reversion rebound to target the next resistance at 28000. On the other hand, a daily close below 26290 revives the bearish tone for a push back down to retest the major range support of 24870/500.

Nikkei 225 – Further up move within an ascending range

click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate support: 21070

Pivot (key support): 20820

Resistances: 21850 & 22490

Next support: 19900

Directional Bias (1 to 3 weeks)

The Japan 225 Index (proxy for the Nikkei 225 futures) has staged a bullish break from a 4-week range configuration in place since 06 Aug 2019 that has invalidated the preferred bearish scenario as per highlighted in our previous report.

Flip to a bullish bias in any dips above 20820 key medium-term pivotal support for a further potential push up to target the next resistance at 21850 with a maximum limit set at 22490 (03 May 2019 swing high). On the other hand, a daily close below 20820 suggests a failure bullish breakout for a choppy decline to retest the range support at 19900.

ASX 200 – Further push up above 6530



click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate support: 6605

Pivot (key support): 6530

Resistance: 6760

Next support: 6355

Directional Bias (1 to 3 weeks)

The Australia 200 Index (proxy for the ASX 200 futures) has cleared above the upper limit of the neutrality range at 6530 and validated a further up move.

In addition, the daily RSI oscillator remains positive above the 50 level which indicates a revival of medium-term upside momentum. We turn bullish in any dips above the 6530 key medium-term pivotal support for a further potential push up to target the 6760 resistance in the first step.

On the other hand, a daily close below 6530 negates the bullish tone a slide back to retest 6355 (15 Aug 2019 swing low & close to the lower boundary of an “Expanding Wedge” from 27 Mar 2019 low).

DAX – Further push up above 11850



click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate support: 11750

Pivot (key support): 11850

Resistances: 12600 & 12800

Next support: 11300

Directional Bias (1 to 3 weeks)

The Germany 30 Index (proxy for the DAX futures) has staged a bullish breakout from a 4-week range configuration in place since 06 Aug 2019. In addition, the daily RSI oscillator has turned bullish above the 50 level which indicates that medium-term upside momentum has resurfaced.

We turn bullish in any dips above the 11850 key medium-term pivotal resistance for a further potential push up to target 12600 follow by 12800 next (upper limit of the “Expanding Wedge” & 76.4% Fibonacci retracement of the previous down move from 23 Jan high to 26 Dec 2018 low).

On the other hand, a daily close below 11850 negates the bullish tone for a slide back to retest the 11300 range support.



Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

The markets are moving. Stop missing out.

OPEN AN ACCOUNT