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Monday, December 10, 2012

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Dec 07, ‘12

S&P 500 Index Chart

S&P 500_Dec0712

Not much has changed from a week ago on the 6 months bar chart pattern of S&P 500 index. On Mon. Dec 3 ‘12, the index briefly entered the resistance zone between 1420 and 1440, but retreated to close lower. After dropping below the 50 day and 20 day EMAs during the next 2 days, the index recovered to close above all three EMAs and marginally higher for the week.

The 20 day EMA is moving up towards the flat 50 day EMA. The 200 day EMA has resumed its up move. The long-term bull market is intact – despite the correction from a triple-top.

Daily technical indicators are bullish. MACD is rising above its signal line and entered positive territory. RSI bounced up again from its 50% level. Slow stochastic bounced up from the edge of its overbought zone.

The index is likely to make another attempt to cross the resistance zone between 1420 and 1440. The drop in unemployment percentage may enthuse the bulls. Bears may not give up ground easily.

FTSE 100 Index Chart

FTSE_Dec0712

The 6 months bar chart pattern of FTSE 100 index closed above the 5900 level for the first time since Oct ‘12, and moved higher than its Nov ‘12 top. The 20 day EMA has crossed above the 50 day EMA, and all three EMAs are moving up with the index above them. The bull market correction from a triple-top pattern is over.

Daily technical indicators are bullish, but looking overbought. MACD is rising above its signal line in positive territory. RSI is inside its overbought zone, where it doesn’t like to remain for long. Slow stochastic is well inside its overbought zone.

The index is just below a long-term resistance zone between 5950 and 6000. Expect a bit of correction or consolidation before the resistance zone can be overcome.

Bottomline? Daily bar chart patterns of S&P 500 and FTSE 100 indices are consolidating below resistance zones. Both indices have recovered after undergoing bull market corrections from triple-top reversal patterns. Hold on to current positions. Add more after the indices cross their resistance zones.

1 comment:

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