Amazon deals

Monday, May 30, 2016

Stock Index Chart Patterns: S&P 500 and FTSE 100 - May 27, 2016

S&P 500 index chart


Failure to technically breach the 2040 level on the downside and positive divergence on the Slow stochastic - both mentioned in last week's post on the daily bar chart pattern of S&P 500 - had given a hint of a possible rally towards 2080.

The index rallied even further, closing just below the 2100 level and gaining 2.3% on a weekly closing basis. Bears are not out of the game yet, because sliding volumes may bring an end to last week's rally.

All three EMAs are rising and the index is trading above them in a bull market. But failure to cross above previous tops of Apr '16 and Nov '15 doesn't augur well for bulls. 

The bearish pattern of 'lower tops and lower bottoms' visible on the 200 day EMA is another sign that bulls may be losing control of the chart.

All three daily technical indicators are in bullish zones, and showing upward momentum. However, Slow stochastic is well inside its overbought zone, which may trigger a correction.

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the 12th week in a row. Weekly technical indicators are in bullish zones and showing slight upward momentum.

FTSE 100 index chart


The daily bar chart pattern of FTSE 100 shows that bulls won last week's battle, though they are nowhere close to winning the war.

The index broke out above the rectangular range between 6200 and 6050 within which it was consolidating since the beginning of the month - losing momentum after crossing above its 200 day EMA.

The index gained 1.8% on a weekly closing basis. However, volumes tapered off as the index moved sideways during the last two days of the week.

Of the three daily technical indicators, MACD and RSI are in bullish zones, but their upward momentum looks weak. Slow stochastic is well inside its overbought zone, and can trigger a correction.

On longer term weekly chart (not shown), the index just managed to close above its 50 week EMA, but closed below its 200 week EMA in a long-term bear market for the 6th week in a row. Weekly technical indicators are looking bullish, but not showing much upward momentum. 

No comments: