Monday, June 4, 2018

S&P 500 and FTSE 100 charts (Jun 01, 2018): bulls yet to come out of the woods

S&P 500 index chart pattern

The following comments were made in last week's post on the daily bar chart pattern of S&P 500: "Slow stochastic has formed a 'double top' reversal pattern inside its overbought zone. Some more consolidation or correction is likely."

After a long weekend, the index dropped to an intra-day low of 2677 on Tue. May 29, and closed below its 20 day and 50 day EMAs at 2690. Bulls used the opportunity to 'buy the dip'. The index rose above its 20 day and 50 day EMAs and closed with a weekly gain of about 0.5%. 

Daily technical indicators are in bullish zones. MACD has merged with its signal line, and is moving sideways. RSI and Slow stochastic briefly dropped below their respective 50% levels before recovering.

Bulls may make another attempt to fill 'GAP 2' - either partly or completely. Their previous two attempts had failed. May be it will be 'third time lucky'? Even if it is, the upper edge of 'GAP 2' can provide tougher resistance.

The two down-days last week (Tue. May 29 and Thu. May 31) had the highest transaction volumes. That is probably a sign of 'distribution' from stronger to weaker hands. 

On longer term weekly chart (not shown), the index closed above its three rising weekly EMAs in a long-term bull market. Weekly technical indicators are in bullish zones, but showing very little upward momentum.

FTSE 100 index chart pattern

The daily bar chart pattern of FTSE 100 corrected below its 20 day EMA to an intra-day low of 7610 on Tue. May 29. It bounced up the next day, and closed above its 20 day EMA.

The index consolidated above its 20 day EMA in bull territory till the end of the week, but lost about 0.4% on a weekly closing basis.

Daily technical indicators have corrected overbought conditions. MACD and RSI are showing downward momentum in bullish zones. Slow stochastic is trying to recover after falling below its 50% level.

The index may attempt to cross above its Jan '18 top of 7793 after some more consolidation in the zone between 7610 and 7793. (At the time of writing this post, FTSE is trading about 40 points higher.)

On longer term weekly chart (not shown), the index closed well above its  three weekly EMAs in a long-term bull market, and formed a 'hammer' candlestick that has bullish implications. Weekly MACD is rising inside its overbought zone. RSI is rising above its 50% levelSlow stochastic is correcting inside its overbought zone.

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