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Monday, March 7, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 – Mar 04, 2016

S&P 500 index chart


After closing below the 50 day EMA on the first day of the week, the daily bar chart pattern of S&P 500 resumed its rally and crossed briefly above its 200 day EMA for the first time in more than 2 months on Fri. Mar 4.

Late profit booking ensured that the index closed exactly at its 200 day EMA - with a gain of 2.7% on a weekly closing basis.

Is the correction over? It appears so - though a convincing move above the 200 day EMA is required for a technical confirmation. 

Daily technical indicators are in bullish zones, with MACD continuing to rise above its signal line in positive zone and RSI gradually moving up towards its overbought zone.

Slow stochastic is well inside its overbought zone, and hinting at a pullback by the index towards its rising 20 day and 50 day EMAs. 

If the index finds support around 1960 and bounces up, it will be a good buying opportunity.

On longer term weekly chart (not shown), the index crossed above its 20 week EMA but is facing resistance from its 50 week EMA. The index closed 180 points above its rising 200 week EMA in a long-term bull market. Weekly technical indicators are turning bullish and showing good upward momentum.

FTSE 100 index chart


The daily bar chart pattern of FTSE 100 shook off a mid-week bear attack and closed at its highest level in 2016, with a 1.7% gain on a weekly closing basis.

However, the index fell 50 points short of testing resistance from its 200 day EMA, and remains in bear territory.

Two of the three daily technical indicators - MACD and Slow stochastic - are looking overbought, and hinting at a possible correction or consolidation. RSI is moving sideways above its 50% level.

A likely pullback and subsequent bounce up from the 6050 level can be a buying opportunity.

On longer term weekly chart (not shown), the index closed above its 20 week EMA but more than 100 points below its sliding 50 week and 200 week EMAs in a long-term bear market. Weekly technical indicators are looking bullish and showing good upward momentum, but MACD is still in negative zone.

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