FIIs were net buyers of equity on Mon. and Wed. (Jan 28 and 30) but net sellers on Tue. Their total net selling was worth only Rs 6.7 Million. DIIs were net buyers of equity on all three trading days. Their total net buying was worth Rs 6.7 Billion, as per provisional figures.
India's economic activity showed signs of slowing down in Dec '18, reflecting a pullback in new orders and belying hopes of a quick turnaround suggested by Nov '18 data.
According to ICRA, as many as 898 corporate insolvency cases are awaiting resolution as of Dec '18, up from 768 cases as on Sep '18. Only 79 cases have yielded a resolution, while 302 cases have entered liquidation as of Dec '18.
A false upward breakout from a 'diamond' pattern (refer last week's technical update) on the daily bar chart pattern of Nifty has effectively ended the counter-trend rally from its Oct '18 low.
The index has resumed the next leg of its down move from its Aug '18 top. That sounds rather ominous for bulls, and so it should be.
The sharp index fall on Mon. Jan 28 not only breached the 200 day EMA, but also gave a breakout below the large 'rising wedge' pattern within which the index was trading during the previous 15 weeks.
The Bollinger Bands are widening, and the 20 day SMA (green dotted line) and 50 day EMA have started moving down towards the 200 day EMA. Today's pullback from the lower Bollinger Band faced twin resistances from the 200 day EMA and the lower edge of the 'wedge'.
Daily technical indicators are in bearish zones. MACD has dropped below its signal line and entered bearish zone. RSI has dropped below its 50% level. Slow stochastic has entered its oversold zone, and may have triggered today's mild pullback attempt.
Nifty's TTM P/E has moved down to 25.84 - but remains much higher than its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is rising in neutral zone - hinting at near-term consolidation or correction.
Economic slowdown in China and an aggressive US stance in their tariff war can lead to a domino effect in the global economy. A likely no-deal BrExit is another joker in the pack. The Indian stock market has not yet discounted the possibility of a coalition government after the general elections. (Why else would Nifty be trading at such a high valuation?)
A test of support from the Oct 26 '18 low of 10004.50 is looking well within the realms of possibility. (Bears will have a field day if 10000 gets breached!)
WTI Crude Oil chart
The daily bar chart pattern of WTI Crude Oil managed to move above its 50 day EMA, but retreated after facing strong resistance from the 'support/resistance zone' between 53 and 55.
Oil's price bounced up a bit after getting support from its 20 day EMA, but is trading well below its falling 200 day EMA in a bear market.
Daily technical indicators are turning bearish. MACD is above its signal line in bullish zone, but may be forming a 'rounding top' reversal pattern. RSI is seeking support from its 50% level. Slow stochastic has corrected down from its overbought zone.
US sanctions may curb oil exports from Venezuela, but with China's economy slowing down and ample global supply, a sustained rally in oil's price is unlikely.
On longer term weekly chart (not shown), oil's price closed below its three weekly EMAs in long-term bear territory. Weekly technical indicators are in bearish zones and not showing much upward momentum. The 50 week EMA has just crossed below the 200 week EMA - the 'death cross' technically confirming a long-term bear market.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil touched an intra-day high of 63.15 on Mon. Jan 21, but could not sustain above the 'support/resistance zone' between 61 and 63.
Oil's price has since closed below its 20 day EMA - and well below its sliding 200 day EMA in a bear market.
Daily technical indicators are looking bearish. MACD is moving sideways above its signal line in bullish zone. RSI has slipped below its 50% level. Slow stochastic has fallen from its overbought zone after forming a 'double top' reversal pattern.
Some more correction and/or consolidation is possible.
On longer term weekly chart (not shown), oil's price closed below its three weekly EMAs in long-term bear territory, but maybe forming a bullish 'inverse head and shoulders' pattern. Weekly technical indicators are in bearish zones but not showing any upward momentum.
S&P 500 index chart pattern
Note the following comment from last week's post on the daily bar chart pattern of SPX 500: "Bears can be expected to put up a stronger resistance when trading starts on Tue. Jan 22 (after the long weekend)."
On cue, the index retreated on Tue. Jan 22 but received good support from its 50 day EMA. After consolidating sideways within a narrow range for the next two days, the index opened with an upward 'gap' on Fri. Jan 25, and crossed above the (purple) down trend line intra-day.
However, it dropped down to close exactly on the down trend line - losing 6 points during the truncated trading week. Bulls have their work cut out to overcome twin overhead resistances from the upper Bollinger Band and the 200 day EMA. Bears are unlikely to give up control in a hurry.
Daily technical indicators are in bullish zones, but not showing much upward momentum. MACD is rising above its signal line. RSI is moving sideways above its 50% level. Slow stochastic has bounced up weakly from the edge of its overbought zone. The index is trading below its 200 day EMA in bear territory.
On longer term weekly chart (not shown), the index closed well above its 200 week EMA in long-term bull territory, but faced resistance from its 20 week EMA and closed just below it. Weekly MACD is rising in bearish zone. RSI is facing resistance from its 50% level. Slow stochastic has moved above its 50% level.
FTSE 100 index chart pattern
The daily bar chart pattern of FTSE 100 touched an intra-day high of 6988 on Mon. Jan 21 but closed lower at 6971. By failing to close above the Jan 11 top of 7002, the bullish 'inverse head and shoulders' pattern (refer last week's post) got negated.
Bears used the rise to sell. The index dropped down during the rest of the week and closed at 6809 - losing more than 150 points (2.3%) on a weekly basis. (At the time of writing this post, the index is trading more than 30 points lower.)
Daily technical indicators have turned bearish. MACD has crossed below its signal line in neutral zone. RSI has dropped below its 50% level. Stochastic has entered its oversold zone.
The index is trading below its three EMAs in a bear market. Some more correction is likely.
On longer term weekly chart (not shown), the index faced twin resistances from its 20 week and 200 week EMAs and closed below its three weekly EMAs in long-term bear territory. Weekly technical indicators are in bearish zones. MACD has crossed above its falling signal line inside its oversold zone. RSI is falling below its 50% level. Stochastic has dropped below its 50% level.
FIIs were net buyers of equity on Fri. (Jan 25) but net sellers on the first four trading days. Their total net selling was worth Rs 5.6 Billion. DIIs were net sellers of equity on Tue. and Fri., but net buyers during Mon., Wed. and Thu. (Jan 21, 23 and 24). Their total net buying was worth Rs 12.6 Billion, as per provisional figures.
India Inc's profit-to-GDP ratio (for Nifty 500 index companies) dropped to a 15 years low of 2.8% in FY '18 from 5.5% in FY '08, as per a study by Motilal Oswal. For all companies (including unlisted ones), profit-to-GDP ratio declined from 7.8% to 3% in the same period.
India's exports to China increased from US $6.37 Billion during Jun-Nov '17 to US $8.46 Billion during Jun-Nov '18 - benefitting from the ongoing tariff war between USA and China.
BSE Sensex index chart pattern
The following comment was made in last week's post on the daily bar chart pattern of Sensex: "By failing to press home their advantage following the upward breakout, bulls have left the door open for a possible 'false' upward breakout."
After making a smart start to the week by touching a high of 36701 intra-day on Mon. Jan 21 and closing at the highest level in 3 months, the index dropped below its 20 day EMA by the end of the week - losing 1% on a weekly closing basis.
The upward breakout from the 'diamond' pattern had lacked volume confirmation, and has turned into a false breakout.
Sensex closed more than 500 points above its 200 day EMA in bull territory. It has been trading above its long-term moving average for the past 4 weeks. However, caution is advised for those holding long positions.
Any fall below the 200 day EMA can lead to a deeper correction, and a likely test of its Oct '18 low of 33292. Expect bulls to put up a fight to defend the long-term moving average.
Daily technical indicators are looking neutral to bearish. MACD has slipped below its signal line in bullish zone. ROC has dropped below its 10 day MA in neutral zone. RSI is falling towards its 50% level. Slow stochastic has fallen below its 50% level. Some more correction seems likely.
F&O expiry on Jan 31 and interim budget on Feb 1 are important events next week. The ED and CBI appear to have suddenly gone on nationwide overdrive. That may crush bullish hopes of an already jittery market.
A lot will depend on FIIs. They turned net buyers on Fri. Jan 25, and can help to prop up the market.
NSE Nifty index chart pattern
The following comments appeared in last week's post on the daily bar chart pattern of Nifty: "Note that there was no significant increase in trading volumes, which is required to technically confirm an upward breakout. The fact may encourage bears to mount an attack and turn the upward breakout into a 'false' one."
Bears acted as expected. The index formed a weekly 'reversal' bar (higher high, lower close) and dropped to seek support from its 20 week EMA - losing almost 1.2% on a weekly closing basis.
Nifty closed above its 50 week and 200 week EMAs in a long-term bull market. However, a correction towards the Fibonacci support zone between 10283 and 9827 remains a possibility.
Weekly technical indicators are looking bullish to neutral. MACD is moving sideways above its signal line in neutral zone. ROC has formed a 'head-and-shoulders' reversal pattern and crossed below its 10 week MA in neutral zone. RSI is moving sideways above its 50% level. Slow stochastic has entered its overbought zone after four months.
After touching a high of 26.54 on Tue. Jan 22, Nifty's TTM P/E has moved down to 26.14, but remains well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is moving down in neutral zone. Some correction or consolidation is possible.
Bottomline? Sensex and Nifty charts had broken out above 'diamond' patterns, but the breakouts have turned out to be false ones. Both indices are trading above their long-term moving averages in bull territories. Corrective down moves from Aug '18 tops can restart at any time. FII buying may help prevent such an occurrence.
FIIs were net sellers of equity on all three trading days this week. Their total net selling was worth Rs 11.5 Billion. DIIs were net sellers on Tue. Jan 22, but net buyers on Mon. & Wed. (Jan 21 & 23). Their total net buying was worth Rs 10.2 Billion, as per provisional figures.
In a bid to win a $20-billion Indian Air Force (IAF) order for 114 combat planes, Swedish manufacturer Saab has offered to build 96 Gripen fighter jets in India. The order seeks commitment from vendors about their willingness to supply sensitive technologies as well as carry out bulk of their manufacturing in India.
According to D&B Economy Forecast, concerns about the government curtailing its investment due to significant shortfall in tax collections against the target, are expected to keep India's industrial activity subdued in the near term.
The following remark appeared in last week's technical update on the daily bar chart pattern of Nifty: "A convincing index close above the previous (Dec 19th) top of 10985 is necessary if bulls are to regain control of the chart."
On Mon. Jan 21, the index touched an intra-day high of 10987.50 - its highest level in more than 3 months - but closed lower at 10961.90. Failure to close above its previous (Dec 19th) top of 10985 was used as a trigger for selling by bears.
Nifty closed lower on Tue. Jan 22 and corrected sharply today to close below its 20 day EMA. However, it is trading above its 50 day and 200 day EMAs in bull territory. Note that the upward breakout from the 'diamond' pattern on Tue. Jan 15 lacked follow-up buying, and is turning into a 'false' breakout.
Daily technical indicators are turning bearish, and showing downward momentum. MACD is seeking support from its signal line in bullish zone. RSI has dropped to its 50% level. Slow stochastic slipped down from its overbought zone. Some more correction is possible.
Nifty's TTM P/E has moved up to 26.32 - which is much higher than its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is in neutral zone - hinting at near-term consolidation.
Q3 (Dec '18) results have mostly been as per, or below, expectations with margin pressure clearly visible. Positive surprises have been few and far between.
BrExit-led recession and China growth uncertainties can seriously hamper global economic growth. Selling in equities is becoming visible across Asia, Europe and USA. India's domestic-focussed economy should continue to do well, but the uncertain outcome of forthcoming general elections is keeping FIIs on tenterhooks.
For the past three months, Nifty has consolidated sideways without giving a clear hint about which direction it will move next. A successful test of, and bounce up from, the Oct '18 low will be bullish. A convincing fall below the Oct '18 low - if it does occur - will be quite bearish.
Staying on the sidelines is a good idea till the index makes a clear directional move. Unless you are trading for a living, buying the dips or selling the rallies may be futile endeavours.
Gold chart pattern
Note the following comments from the previous post on the daily bar chart pattern of Gold: "Formation of a 'reversal day' bar (higher high, lower close) with a surge in volumes have put a temporary halt to the rally. Some correction/consolidation can be expected after a hectic rally."
Gold's price consolidated sideways within a small 'symmetrical triangle' for two weeks before a downward breakout occurred on Fri. Jan 18th. The 20 day EMA provided support - as it has done since the beginning of Dec '18. However, the support may not hold for long.
Daily technical indicators are in bullish zones, but looking bearish and showing downward momentum. MACD has crossed below its signal line and is ready to drop from its overbought zone. RSI and Slow stochastic are falling towards their respective 50% levels.
Gold's price may fall to the 'support/resistance zone' between 1260 and 1270 - where some support can be expected. A further fall and a test of support from the 200 day EMA can't be ruled out.
On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory for the fourth straight week. Weekly technical indicators are in bullish zones. MACD is rising above its signal line. RSI has started to correct above its 50% level. Slow stochastic is falling inside its overbought zone.
Silver chart pattern
Note the following comments from the previous post on the daily bar chart pattern of Silver: "After falling just short of the 16.0 level intra-day, silver's price has made a temporary retreat to 15.76. A pullback towards the 200 day EMA is a possibility."
Since then, silver's price has been in a down trend (marked by purple trend line). On Fri. Jan 18th, a test of support from the 200 day EMA was followed by a close below the 20 day EMA for the first time in 7 weeks.
Daily technical indicators are looking bearish after correcting overbought conditions. MACD has crossed below its signal line and is poised to drop from its overbought zone. RSI is falling towards its 50% level. Slow stochastic has dropped below its 50% level into bearish zone. A fall below the 200 day EMA is on the cards.
On longer term weekly chart (not shown), silver’s price closed above its 20 week EMA, but below its 50 week and 200 week EMAs in a long-term bear market. Weekly technical indicators are turning bearish. MACD is rising above its signal line in neutral zone. RSI is falling towards its 50% level. Slow stochastic is correcting inside its overbought zone.
S&P 500 index chart pattern
After a day's correction on Mon. Jan 14, the daily bar chart pattern of SPX 500 brushed past bear resistance at 2600, and soared above its 50 day EMA to close at 2670 with a 2.9% weekly gain.
Looming overhead is a resistance zone (marked by light gray oval), where the sliding 200 day EMA, the upper Bollinger Band and the (purple) down trend line have converged.
Bears can be expected to put up a stronger resistance when trading starts on Tue. Jan 22 (after the long weekend).
Daily technical indicators are looking bullish. MACD is rising above its signal line in bullish zone. RSI is moving up above its 50% level. Slow stochastic is moving sideways inside its overbought zone, and can trigger a correction.
On longer term weekly chart (not shown), the index closed well above its 200 week EMA and just above 20 week EMA in long-term bull territory, but remains below its falling 50 week EMA. Weekly technical indicators are in bearish zones. MACD has started to move up inside its oversold zone. RSI and Slow stochastic are moving up towards their respective 50% levels.
FTSE 100 index chart pattern
The daily bar chart pattern of FTSE 100 consolidated sideways during the first three trading days - facing resistance from its 50 day EMA and getting support from its 20 day EMA.
On Thu. Jan 17, the index dropped below its 20 day EMA and the 6800 level intra-day, but recovered to close at 6835 (just below its 20 day EMA). Bulls bought the dip on Fri. Jan 18.
The index remains below its falling 200 day EMA in a bear market, but closed above its 20 day and 50 day EMAs with a 0.7% weekly gain. FTSE may have formed a bullish 'inverse head and shoulders' reversal pattern with an upward-sloping neckline.
Note that the index is yet to breakout above the neckline. A convincing close above the Jan 11 top of 7002 with good volume support is required to technically confirm the reversal pattern. (At the time of writing this post, the index is trading around 6980.)
Daily technical indicators are looking bullish. MACD is moving sideways above its signal line in bullish zone. RSI has bounced up after getting support from its 50% level. Stochastic has re-entered its overbought zone.
On longer term weekly chart (not shown), the index tested resistance from its 200 week EMA and closed just below it at 6968. It remains below its three weekly EMAs in long-term bear territory. Weekly technical indicators are turning bullish. MACD has crossed above its falling signal line inside its oversold zone. RSI is rising towards its 50% level. Stochastic is moving up above its 50% level.
FIIs were net buyers of equity on Tue. and Thu. (Jan 15 and 17) but net sellers on the other three trading days. Their total net buying was worth Rs 0.54 Billion. DIIs were net sellers of equity on Thu. and Fri., but net buyers during the first three days. Their total net buying was worth Rs 5.2 Billion, as per provisional figures.
As per data available till Sep '18, the total debt of the Indian government has increased by more than 49% to Rs 82 Trillion during NDA's 4.5 year stint - from Rs 54.9 Trillion in Jun '14.
Volatility in crude oil prices has hit synthetic textile manufacturers hard, with frequent change in buying behaviour observed for both raw material and finished product segments.
BSE Sensex index chart pattern
In last week's post on the daily bar chart pattern of Sensex, the following four possible outcomes of a breakout from the 'diamond' pattern was mentioned: a downward breakout, an upward breakout, a 'false' upward/downward breakout, and a sideways move through the right 'apex'.
On Mon. Jan 14, the index dropped below the 'diamond' and its 50 day EMA intra-day, but recovered to close above its 50 day EMA inside the 'diamond'. That negated the expected downward breakout possibility.
On Tue. Jan 15, the index had an upward breakout and a close above the 'diamond' - on the back of combined FII and DII buying - raising bullish hopes. However, trading volumes (not shown) was not significantly higher - which is required for technical confirmation of an upward breakout.
There was little follow-up buying during the last three days of trading, as the index consolidated sideways with a slight upward bias. The index pulled back to the top of the 'diamond' on Thu. and Fri, attracting some buying.
By failing to press home their advantage following the upward breakout, bulls have left the door open for a possible 'false' upward breakout. The index is above its three EMAs in bull territory. However, caution is advised as any correction from current levels can trigger the next leg of the down move from the Aug 29 '18 top.
Daily technical indicators are in bullish zones but not showing much upward momentum. MACD has managed to move above its signal line. ROC has turned down after facing resistance from the edge of its overbought zone. RSI is moving sideways above its 50% level. Slow stochastic has started to slide down inside its overbought zone.
Market fundamentals are not conducive for bulls. Inflation is falling due to lower food prices, which means agrarian distress is increasing. The Rupee is depreciating against the US Dollar while oil price is moving up - worsening India's balance of payment situation.
Opposition parties are joining hands in a bid to counter the BJP in the upcoming general elections. If they manage to retain their alliance till voting time, an upset may be on the cards. The stock market doesn't seem to have 'priced in' that possibility yet.
On the global front, uncertainty due to BrExit and US-China trade war will keep FIIs from committing to emerging markets in a big way. Without their buying support, the index can succumb to gravity.
NSE Nifty index chart pattern
After closing inside a 'diamond' pattern for 11 straight weeks, the weekly bar chart pattern of Nifty managed to breakout and close above the 'diamond', but only after an intra-week fall below it.
Note that there was no significant increase in trading volumes, which is required to technically confirm an upward breakout. The fact may encourage bears to mount an attack and turn the upward breakout into a 'false' one.
Weekly technical indicators are looking bullish but not showing much upward momentum. MACD has moved above its signal line to touch its '0' line. ROC has dropped from its overbought zone, but is above its rising 10 week MA. RSI is moving sideways above its 50% level. Slow stochastic is poised to enter its overbought zone.
Nifty's TTM P/E has moved up to 26.19, which is well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has bounced up sharply after falling almost to the edge of its overbought zone, and can limit near-term index upside.
Bottomline? Sensex and Nifty charts have broken out above 'diamond' patterns, but the breakouts have not been convincing without accompanying volume surges. Both indices are trading above their long-term moving averages in bull territories. However, resumptions of corrective down moves from Aug '18 tops can't be ruled out. If you must buy, stick to the highest quality stocks.
(Note: Learn how to choose fundamentally strong stocks. Become a paid subscriber of my Monthly Investment Newsletter. A limited number of new subscriptions are being offered to blog visitors, followers and subscribers for two more days only - till Jan 21, 2019. Contact me for details: mobugobu@yahoo.com.)
In the 1980s, John Bollinger, a long-time technician of the markets, developed the technique of using a moving average with two trading bands above and below it.
Unlike a percentage calculation from a normal moving average, Bollinger Bands simply add and subtract a standard deviation calculation.
Standard deviation is a mathematical formula that measures volatility, showing how the stock price can vary from its true value. By measuring price volatility, Bollinger Bands adjust themselves to market conditions.
This is what makes them so handy for traders: they can find almost all of the price data needed between the two bands. Read on to find out how this indicator works, and how you can apply it to your trading.
Read more at:
https://www.investopedia.com/articles/technical/102201.asp
FIIs were net buyers of equity on Tue. (Jan 15), but net sellers on Mon. & Wed. (Jan 14 & 16). Their total net selling was worth Rs 6.6 Billion. DIIs were net buyers on all three trading days. Their total net buying was worth Rs 12.5 Billion, as per provisional figures.
India's wholesale and retail inflation eased further in Dec '18 on the back of cooling food and fuel prices. CPI-based inflation slipped to an 18 months low of 2.19% from 2.33% in Nov '18 and 5.21% in Dec '17. WPI-based inflation was at an 8 months low of 3.8% against 4.64% in Nov '18 and 3.58% in Dec '17.
A vicious battle for supremacy is raging on the daily bar chart pattern of Nifty, with no quarter given and none asked.
On Mon. Jan 14, the index dropped below the 'diamond' pattern - within which it has been trading since the beginning of Nov '18 - and even slipped below its 200 day EMA into bear territory intra-day.
Just when it looked like bears were going to dominate, bulls bought the intra-day dip and ensured that the index closed just within the 'diamond'. On Tue. Jan 15, the index broke out and closed above the 'diamond' pattern on the back of combined FII and DII buying.
However, the breakout has not been a convincing one. Volumes (not shown) were not significantly higher to technically confirm the upward breakout. Today's lacklustre trading and formation of a small 'shooting star' candlestick pattern is an indication that bulls were unable to drive home their advantage.
Nifty is trading above its three EMAs in bull territory. A convincing index close above the previous (Dec 19th) top of 10985 is necessary if bulls are to regain control of the chart.
Daily technical indicators are in bullish zones, but not showing much upward momentum. MACD is moving sideways after merging with its signal line. RSI is above its 50% level. Slow stochastic is rising towards its overbought zone.
Nifty's TTM P/E has moved up to 26.17 - which is much higher than its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is oscillating in neutral zone - hinting at some near-term consolidation.
Q3 (Dec '18) results declared so far have been a mixed bag. Upcoming results of Reliance, HUL, ITC can give some impetus to bulls.
But oil's price is inching up and the Rupee is slipping against the US Dollar. So, the probability of a sustained bull rally appears low.
(Note: Thinking of adding quality mid-cap and small-cap stocks to your portfolio? Subscribe to my Monthly Investment Newsletter. Paid subscriptions are being offered to blog visitors, followers and subscribers for 5 more days only - till Jan 21, 2019. Contact me at mobugobu@yahoo.com for details.)
WTI Crude Oil chart
The following remark was made in the previous post on the daily bar chart pattern of WTI Crude Oil: "Some price consolidation can be expected, as bulls may try to defend the long-term support/resistance level of 42."
Bulls did put up a strong defence at the long-term 'support/resistance' level of 42 - aided by positive divergences visible on MACD and RSI (which touched higher lows).
Oil's price had touched an intra-day low of 42.36 on Dec 24 and closed at 42.53. On the next trading day (Dec 26), oil's price recovered from an intra-day low of 42.52 to close at 46.22.
After a brief sideways consolidation, oil's price easily climbed above its 20 day EMA and rose to test resistance from its 50 day EMA. Bears used weakness in the Chinese economy as a trigger to start selling.
Daily technical indicators are turning bearish. MACD is rising above its signal line in bearish zone, but its upward momentum is weakening. RSI is seeking support from its 50% level. Slow stochastic has started correcting inside its overbought zone.
Oil's price is trading well below its falling 200 day EMA in a bear market. Some more correction, or consolidation around current levels, can be expected.
On longer term weekly chart (not shown), oil's price closed well below its three weekly EMAs in long-term bear territory. Weekly technical indicators are correcting oversold conditions. The 50 week EMA is about to cross below the 200 week EMA - the 'death cross' will technically confirm a long-term bear market.
Brent Crude Oil chart
The following remarks appeared in the previous post on the daily bar chart pattern of Brent Crude Oil: "MACD and RSI are showing positive divergences by touching higher bottoms inside their respective oversold zones. Some price consolidation or pullback may be on the cards."
On Dec 26 '18, oil's price slipped below 50 intra-day but closed 4 points higher - forming a 'reversal day' bar (lower low, higher close) that triggered a smart pullback rally that soared past the 20 day EMA but faced strong resistance from the 50 day EMA.
Daily technical indicators are turning bearish. MACD is rising above its signal line in bearish zone, but its upward momentum is losing strength. RSI has dropped back to seek support from its 50% level. Slow stochastic is correcting inside its overbought zone.
Oil's price closed well below its falling 200 day EMA in a bear market. Some more correction and/or consolidation is likely.
On longer term weekly chart (not shown), oil's price closed below its three weekly EMAs in long-term bear territory, but maybe forming a bullish 'inverse head and shoulders' pattern. Weekly technical indicators are correcting oversold conditions.
S&P 500 index chart pattern
After five straight sessions of higher closes, the pullback rally on the daily bar chart pattern of SPX 500 failed to overcome resistance from the 'support/resistance' level of 2600 and closed slightly lower.
The index closed above its 20 day EMA with a weekly gain of 2.5%, but is trading below its 50 day and 200 day EMAs in a bear market.
The sharp 'V' shaped rally from the Dec '18 low is typical of bear market rallies. The sliding volumes during the rally is an indication that the rally has probably run its course.
Daily technical indicators are looking bullish. MACD is rising above its signal line in bearish zone. RSI is moving sideways just above its 50% level. Slow stochastic is well inside its overbought zone, and can trigger a correction.
On longer term weekly chart (not shown), the index closed well above its 200 week EMA in long-term bull territory, but remains below its falling 20 week and 50 week EMAs. Weekly technical indicators are in bearish zones. MACD is inside its oversold zone, but has stopped falling. RSI has bounced up sharply from the edge of its oversold zone. Slow stochastic has emerged from its oversold zone.
FTSE 100 index chart pattern
The pullback rally on the daily bar chart pattern of FTSE 100 rose above its 50 day EMA and the 7000 level, but the formation of a 'reversal day' bar (higher high, lower close) on Fri. Jan 11 may have brought the rally to a close.
The index managed to close above 6900 with a weekly gain of 1.2%, but is trading below its falling 200 day EMA in a bear market. (At the time of writing this post, the index is trading about 30 points lower after forming a small downward 'gap'.)
Daily technical indicators are bullish. MACD is rising above its signal line and looks poised to enter bullish zone. RSI has moved above its 50% level. Stochastic is correcting inside its overbought zone, and can trigger a correction.
On longer term weekly chart (not shown), the index continued its recovery from its 2 years low (touched on Dec 27 '18) to close above 6900. It remains below its three weekly EMAs in long-term bear territory. Weekly technical indicators are in bearish zones. MACD is ready to cross above its falling signal line inside its oversold zone. RSI and Stochastic are rising towards their respective 50% levels.
