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Monday, February 8, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Feb 05, 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 sharply above its 20 day EMA to touch an intra-day high of 1947 on Mon. Feb 1.

The 135 points rally - due to a combination of short covering and value buying - was enough to lure bears out of the shadows. Readers were warned about the possibility in last week's post.

The index dropped, and stayed, below the 20 day EMA for the rest of the week and closed at 1880, losing 3% on a weekly closing basis.

Daily technical indicators are looking bearish. MACD is turning down towards its rising signal line in negative zone. RSI faced strong resistance from its 50% level and is moving down. Slow stochastic has dropped from its overbought zone.

All three EMAs are falling, and the index is trading below them in bear territory. The Jan 20 low of 1812 is likely to be tested.

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

FTSE 100 index chart


The daily bar chart pattern of FTSE 100 briefly crossed above the 6100 level intra-day on Feb 1 '16, and managed to close just above its falling 50 day EMA for the second day in a row.

Bears snuffed out flickering bullish hopes the very next day. The index dropped, and stayed, below its 20 day EMA for the rest of the week - losing almost 3.9% on a weekly closing basis.

At the time of writing this post, the index has dropped below the 5750 level and looks ready to test and breach its Jan 20 low of 5640.

Daily technical indicators are in bearish zones and showing downward momentum. MACD has just crossed below its signal line in negative zone. RSI and Slow stochastic are falling below their respective 50% levels.

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

1 comment:

Subhankar said...

Have Stocks Bottomed? These 2 Critical Indicators Reveal the Answer...

http://dailyreckoning.com/have-stocks-bottomed-these-2-critical-indicators-reveal-the-answer/