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Monday, October 26, 2015

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Oct 23, 2015

S&P 500 Index Chart

SPX_Oct2315

The daily bar chart pattern of S&P 500 faced resistance from the blue down trend line and dropped below its 200 day EMA midweek.

On Thu. Oct 22, the index crossed above its long-term moving average and the down trend line – accompanied by a spurt in volumes – and closed at a 2 months high.

The 20 day EMA has crossed above its 50 day EMA, and both EMAs are moving up. The ‘death cross’ (marked by blue oval) is likely to get negated soon by a ‘golden cross’ of the 50 day EMA above the 200 day EMA.

The 2 months long foray inside bear territory seems to be over. All three daily technical indicators are in bullish zones. MACD is rising inside its overbought zone. Slow stochastic is oscillating inside its overbought zone, and showing negative divergence by failing to touch a new high with the index.

Expect some consolidation or correction before the index can attempt to climb to a new high.

On longer term weekly chart (not shown), the index closed well above its three weekly EMA in a long-term bull market. Weekly technical indicators are looking bullish, and showing good upward momentum.

FTSE 100 Index Chart

FTSE_Oct2315

After breaking out upwards from a ‘rectangle’ pattern, the daily bar chart pattern of FTSE 100 consolidated sideways within a ‘triangle’ pattern – from which it broke out upwards on Fri. Oct 23 ‘15.

The 20 day EMA is about to cross above the 50 day EMA. The index needs to cross above its sliding 200 day EMA to return to bull territory. Bears will try to prevent that – though they appear to be steadily losing ground.

Daily technical indicators are in bullish zones, with MACD rising inside its overbought zone and RSI climbing towards its overbought zone.

However, Slow stochastic has dropped from its overbought zone and showing negative divergence by failing to touch a new high with the index.

On longer term weekly chart (not shown), the index managed to close above its 20 week and 200 week EMAs, but is below its 50 week EMA. Weekly MACD and RSI are still in bearish zones, but Slow stochastic has moved above its 50% level. A brief foray into a long-term bear market is about to end.

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