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Monday, December 7, 2015

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Dec 04, 2015

S&P 500 Index Chart

S&P 500_Dec0415

The daily bar chart pattern of S&P 500 briefly crossed above the 2100 level but fell short of the Nov ‘15 top of 2116. The index received good support from its 200 day EMA on the way down.

After  bouncing up with good volumes, the index closed above all three EMAs in bull territory but barely gained a point for the week.

The entire trading since the beginning of Nov ‘15 has been a sideways consolidation within a ‘symmetrical triangle’ pattern, from which a break out can occur at any time.

Since triangles tend to be continuation patterns, the break out is expected to be upwards. But triangles are unreliable – so one should wait for the break out before initiating a buy/sell action.

Daily technical indicators are in bullish zones but giving mixed signals. MACD and RSI are showing some upward momentum, but Slow stochastic is showing downward momentum.

On longer term weekly chart (not shown), the index closed flat for the second week in a row, but well above its three weekly EMAs in a long-term bull market. Weekly technical indicators are in bullish zones.

FTSE 100 Index Chart

FTSE_Dec0415

The daily bar chart pattern of FTSE 100 crossed above the 6400 level but faced strong resistance from the 6450 level.

The index closed below all its three EMAs in bear territory and lost 137 points (more than 2%) for the week.

Daily technical indicators are looking bearish. MACD is about to cross below its signal line in positive zone. RSI has dropped below its 50% level. Slow stochastic is falling rapidly towards its 50% level.

On longer term weekly chart (not shown), the index moved above its entangled 20 week and 200 week EMAs, but formed a ‘reversal bar’ (higher high, lower close) and closed below all three EMAs.

The ‘death cross’ of the 50 week EMA below the 200 week EMA will technically confirm a long-term bear market. Weekly MACD and RSI are in bearish zones but Slow stochastic is showing positive divergence by rising above its 50% level.

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