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Monday, February 1, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Jan 29, 2016

S&P 500 index chart


The daily bar chart pattern of S&P 500 had touched a 52 week low of 1812 on Jan 20 '16, but bounced up after forming a bullish 'hammer' candlestick pattern, supported by strong volumes, to close above the 1900 level.

The index consolidated sideways within a 35 points range for the first four days of the week. On Fri. Jan 29 '16, it spurted on strong volume support above its falling 20 day EMA for the first time during Jan '16, and closed with a 1.7% weekly gain.

Daily technical indicators are turning bullish. MACD has crossed above its signal line in negative zone. RSI has moved up to its 50% level. Slow stochastic has climbed above its 50% level.

The index is trading well below its falling 50 day and 200 day EMAs in bear territory. Bears are lurking round the corner, ready to pounce at any time. 

On longer term weekly chart (not shown), the index closed more than 120 points above its still rising 200 week EMA, but below its falling 20 week and 50 week EMAs. The long-term bull market is still intact. Weekly technical indicators are turning bullish but remain in bearish zones.

FTSE 100 index chart


The following remark appeared in last week's post on the daily bar chart pattern of FTSE 100: "Expect bears to pounce if the technical bounce from oversold conditions tries to turn into another bear market rally."

After facing some resistance from the falling 20 day EMA, the index rallied on good volume support to rise above its 20 day and 50 day EMAs and close the week with a gain of 3.1%.

At the time of writing this post, bears are trying to dominate again. The index has dropped below its 50 day EMA, and is trading more than 300 points below its falling 200 day EMA in a bear market.

Daily technical indicators are looking bullish, but their upward momentum is stalling. MACD is rising above its signal line in negative zone. RSI has crossed above its 50% level. Slow stochastic has entered its overbought zone.

On longer term weekly chart (not shown), the index closed below its three weekly EMAs in a bear market. The imminent 'death cross' of the 50 week EMA below the 200 week EMA is going to technically confirm a long-term bear market. Weekly technical indicators are in bearish zones.

1 comment:

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