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Monday, November 21, 2016

S&P 500 and FTSE 100 charts (Nov 18 '16): in bull markets but bears lurking around the corner

S&P 500 index chart pattern

The daily bar chart pattern of S&P 500 continued to rally during the week. It touched an intra-day high of 2190 on Fri. Nov 18 before retreating a bit - forming a small 'reversal day' bar (higher high, lower close).

The index stopped just short of the lifetime intra-day high of 2194. Interestingly, 2190 was the lifetime closing high. Both highs were touched on Aug 15 '16. 

All three EMAs are rising, and the index is trading above them in a bull market. However, the previous 7 trading bars may have formed a 'rising wedge' pattern from which the likely breakout is downwards. The pattern is still evolving.

Daily technical indicators are looking a bit overbought. MACD is rising above its signal line and entered its overbought zone. RSI is below the edge of its overbought zone but not showing any upward momentum. Slow stochastic is well inside its overbought zone.

The post-election rally was a too sharp. The index may undergo a bit of correction or consolidation before making another attempt to touch a new lifetime high. 

On longer term weekly chart (not shown), the index closed well above its three weekly EMAs in a long-term bull market for the 37th week in a row. All three indicators are in bullish zones and showing upward momentum.

FTSE 100 index chart pattern

The daily bar chart pattern of FTSE 100 remained in pause-mode through the week - consolidating sideways within a narrow range of 6730-6820.

The index remained above its rising 200 day EMA and the support level of 6700 in bull territory, but below its falling 20 day and 50 day EMAs.

Daily technical indicators are in bearish zones and not showing any upward or downward momentum. Bears will try to dominate as long as the index trades below the down trend line (connecting its Oct and Nov '16 tops).

A downward breach of the 6700 level remains a possibility.

On longer term weekly chart (not shown), the index closed just above its 20 week EMA and well above its 50 week and 200 week EMAs in a long-term bull market for the 21st week in a row. Weekly technical indicators are looking bearish and showing downward momentum.

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