Sensex, Nifty charts (Oct 30, 2020): treading water before US elections

For the month of Oct '20, FIIs were net buyers of equity worth Rs 145.37 Billion. DIIs were net sellers of equity worth Rs 173.18 Billion - their highest monthly net selling since Mar '16. Both indices gained more than 3.5% for the month.

India's fiscal deficit during Apr-Sep '20 period touched Rs 9.1 Trillion, which exceeded the full year target of Rs 7.96 Trillion by almost 15%. For FY 2020-21, fiscal deficit may reach 9% of GDP against a target of 3.5%.

The cumulative fiscal deficit for Centre and states may touch 13% of GDP during FY 2020-21 against 7% of GDP during FY 2019-20.

BSE Sensex index chart pattern

After spending almost the entire month above its three daily EMAs in bull territory, the daily bar chart pattern of Sensex slipped below its 20 day EMA during the last two trading days.

The index bounced up after receiving good support from its rising 50 day EMA on the last trading day of Oct '20, and closed more than 2000 points above its 200 day EMA in a bull market.

Bears continue to fight doggedly. The month's trading has formed a bearish 'rounding top' pattern. If the pattern plays out, a re-test of support from the 200 day EMA is possible.

Daily technical indicators are looking bearish and showing downward momentum. MACD has crossed below its signal line in neutral zone. ROC is below its sliding 10 day MA in neutral zone. RSI is falling below its 50% level. Slow stochastic has dropped to the edge of its oversold zone, and can trigger a technical bounce.

Q2 (Jul-Sep '20) results of India Inc. declared so far have mostly exceeded expectations, even as top and bottom lines have degrown. HUL and L&T declared substantial interim dividends. [Companies with better performances usually declare their results earlier. Subsequent results may have more misses than hits.]

NSE Nifty index chart pattern

The weekly bar chart pattern of Nifty closed above its three weekly EMAs in a long-term bull market for the 17th straight week. However, the index dropped below 11700, losing almost 300 points (2.4%) on a weekly closing basis.

Bulls need not worry too much as all three weekly EMAs are still rising, which means bulls are in control of the chart. Note that FIIs  started  selling during the last three days of the week gone by. Also, the past 4 weeks' trading has formed a small 'rounding top' pattern that has bearish implications.

Weekly technical indicators are in bullish zones, but not showing any upward momentum. MACD is above its rising signal line in overbought zone. RSI is moving sideways above its 50% level. Slow stochastic has dropped to the edge of its overbought zone. Some more index consolidation or correction is likely. 

Nifty's TTM P/E has moved down to 31.90 - which remains well above its long-term average and inside its overbought zone. The breadth indicator NSE TRIN (not shown) is oscillating in neutral zone - hinting at near-term index consolidation.
 
Bottomline? Sensex and Nifty charts have been consolidating after reaching close to their lifetime highs (touched back in Jan '20). The stock market appears to be biding its time till US elections get over next week. Dow and S&P 500 indices are correcting in anticipation of a Biden win. Stay cautiously optimistic.

Sensex, Nifty charts (Sep 25, 2020): bears making their presence felt

FIIs were net sellers of equity on all five trading days of the week. Their total net selling was worth a huge Rs 104.91 Billion. DIIs were net sellers of equity on Mon. Sep 21, but were net buyers during the next four days. Their total net buying was worth Rs 42.49 Billion.

The National Council for Applied Economic Research (NCAER) has made a revised projection that India's GDP growth will contract 12.7% in Q2 (Jul-Sep '20), 8.6% in Q3 (Oct-Dec '20) and 6.2% in Q4 (Jan-Mar '21). For FY 2020-21, GDP contraction will touch 12.6%. A thumb rule definition of recession is two straight quarters of contracting GDP.

BSE Sensex index chart pattern

The daily bar chart pattern of Sensex shows that bulls have stumbled at the last hurdle - a 335 points downward 'gap' formed on Feb 28 - in their efforts to propel the index to a new high.

After moving well above the 'gap' to touch an intra-day high of 40010 on Aug 31, the index had formed a large 'reversal day' bar (higher high, lower close) that marked an intermediate top.

Since then, Sensex faced strong resistance from the 'gap', and failed to close above the 'gap' even for a single day. It has formed a bearish pattern of 'lower tops, lower bottoms'. 

On Thu. Sep 24, the index closed below its 200 day EMA for the first time since Jul 1, but bounced up to close above the 200 day EMA in bull territory by the end of the week. Any respite for bulls may be short-lived.

The 20 day EMA has formed a bearish 'rounding top' pattern. The 50 day EMA is also forming a similar pattern. Both EMAs may provide resistance to any upward move by the index. 

Daily technical indicators are looking neutral to bearish. MACD is sliding below its signal line in neutral zone. ROC is in bearish zone, moving up towards its sliding 10 day MA. RSI has bounced up from the edge of its oversold zone. Slow stochastic is trying to emerge from its oversold zone.

The sudden lockdown with 4 hours notice in Mar '20 had created a supply shock for the Indian economy. Millions of job losses, shattered MSMEs and a raging pandemic are now providing a demand shock to the economy, from which it may take 2-3 years to recover.

All prognostications of a 'V' shaped economic recovery should be ignored. An economic recession is hardly conducive to a booming stock market. Small investors should focus on protecting their profits and capital. 

NSE Nifty index chart pattern

The following remark was made in last week's post on the weekly bar chart pattern of Nifty: "Convincing breach of an up trend line is often a sign of trend reversal." 

After crossing the 11750 level on Aug 31, the index had breached the (pink) up trend line, and has formed a bearish pattern of 'lower tops, lower bottoms' since then.

Nifty dropped sharply below the 'support-resistance zone' between 11000-11250 and fell below its 20 week and 50 week EMAs intra-week, before bouncing up to close just inside the 'support-resistance zone' - losing 455 points (3.95%) during the week. 

Bears are not in control yet, since the index managed to close above all three weekly EMAs in long-term bull territory. However, a test of support from the 200 week EMA may be in the offing.

Weekly technical indicators are in bullish zones but showing downward momentum. MACD is above its signal line but forming a bearish 'rounding top' pattern. RSI is falling towards its 50% level. Slow stochastic has slipped down from its overbought zone - hinting at some more correction/consolidation. 

Nifty's TTM P/E has moved down to 32.12, which remains well above its long-term average and deep inside its overbought zone. The breadth indicator NSE TRIN (not shown) has moved up sharply inside its oversold zone. Some near-term index consolidation or correction is likely.
 
Bottomline? After breaching 5 months long up trend lines on Sensex and Nifty charts, both indices continue to consolidate near resistance zones. Some more correction or consolidation is likely. Wait for lower levels to add defensive sector stocks you may already own.

Sensex, Nifty charts (Dec 06, 2019): correcting after touching lifetime highs

FIIs were net buyers of equity on Thu. Dec 5, but net sellers on the other four trading days. Their total net selling was worth Rs 38.6 Billion. DIIs were net sellers of equity on Thu. Dec 5, but were net buyers on the other four days. Their total net buying was worth Rs 24.2 Billion - as per provisional figures.

According to ACMA, auto component sales during Apr-Sep '19 declined 10% YoY to Rs 1.79 Trillion. However, exports grew 3% to Rs 514 Billion, and after-market sales grew 4% to Rs 351 Billion.

As per a Dun & Bradstreet report, India's GDP growth is expected to remain subdued in the near future as the slowdown has deepened and is likely to remain extended for a longer period than previously anticipated.

BSE Sensex index chart pattern

After touching lifetime intra-day and closing highs on Thu. Nov 28, the daily bar chart pattern of Sensex has been in a corrective mode. Profit booking often follows a new index top. Negative divergences visible on all four technical indicators - which failed to touch new tops - had also hinted at some consolidation or correction.

The index is trading well above its rising 200 day EMA in a bull market, but closed below its 20 day EMA for the first time in two months. The long-term technical structure of the index remains bullish. However, formation of back-to-back 'rounding top' patterns is a matter of concern for those holding long positions.

Daily technical indicators are looking bearish to neutral. MACD is falling below its signal line in bullish zone. ROC has dropped to its '0' line. RSI and Slow stochastic are seeking support from their respective 50% levels. Some more near-term index correction or consolidation may follow.

The stock market had expected a 25 bps (0.25%) interest rate cut by RBI on Dec 5. By maintaining status quo and downgrading full year GDP growth, RBI stated the obvious: monetary policy alone is not going to solve the growth problem. Instead of fiscal easing that could have boosted growth, there is talk about increasing GST tax rates, which will further burden consumers. Go figure!

Sensex may be in the process of forming a 'head and shoulders' reversal pattern, with a 'neckline' at 40000. The left 'shoulder' and 'head' have formed already - but the right 'shoulder' is yet to take shape. If the pattern does play out, the minimum downside target will be 38900.

Small investors would do well to sit on the sidelines and avoid value-buying in mid-cap and small-cap stocks.

NSE Nifty index chart pattern

The weekly bar chart pattern of Nifty failed to close above its previous (Jun 7) top of 12103. That was just the excuse that bears needed to go on the attack. The index lost about 135 points (1.1%) on a weekly closing basis, but traded well above its three rising EMAs in a long-term bull market. 

Note that the index has formed a bullish pattern of 'higher tops, higher bottoms' during the past two years - keeping alive the long-term bull market. However, after each of the three previous index tops - in Feb '18, Aug '18, Jun '19 - Nifty corrected 11-15%. A pattern repeat can drop the index below 10800.

Weekly technical indicators are showing bearish signs. MACD is above its rising signal line in bullish zone, but its upward momentum has stalled. ROC has crossed below its 10 week MA, and dropped down from its overbought zone. RSI is seeking support from the edge of its overbought zone. Slow stochastic is moving sideways with a downward bias inside its overbought zone. Some more index correction or consolidation is possible.

Nifty's TTM P/E has moved down to 27.78 - but remains well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is rising sharply inside its oversold zone, and may limit near-term index downside.

Bottomline? Sensex and Nifty charts are undergoing corrections after touching lifetime highs. FIIs have started selling. Caution is advised due to the poor GDP number and a crisis of confidence among consumers.

Sensex, Nifty charts (Nov 01, 2019): bullishness triggered by hopes of more reforms

For the month of Oct '19, FIIs were net buyers of equity after five straight months of net selling. Their total net buying was worth Rs 85.9 Billion. DIIs were net buyers of equity for the sixth month in a row. Their total net buying was worth Rs 47.6 Billion.

Confluence of major festivals and big discounts failed to bring much cheer to auto makers during Oct '19. Maruti and Volkswagen showed marginal sales growth over Oct '18. Renault showed good gains. Hyundai and Toyota showed single-digit de-growth. The rest - cars, 2-wheelers, CVs - showed double-digit de-growth.

IHS Markit India's Manufacturing PMI slipped to a 2-year low of 50.6 in Oct '19 from 51.4 in Sep '19. (A number above 50 indicates expansion.) GST collection in Oct '19 was Rs 954 Billion, which was 3.8% higher than Sep '19 figure of Rs 919 Billion but 5.3% lower than Rs 1.01 Trillion collected in Oct '18.

As per CMIE, India's unemployment rate in Oct '19 climbed to 8.5% - the highest since Aug '16 - from 7.2% in Sep '19. A thriving economy has been brought to its knees by a poorly planned demonetisation and a hastily implemented GST.

BSE Sensex index chart pattern

Bulls came charging out of the gate after the Diwali break. The daily bar chart pattern of Sensex broke out convincingly above the (blue) down trend line on Tue. Oct 29, and rose to touch a new intra-day high of 40392 on Oct 31.

Bulls failed to press home their advantage despite strong equity buying by FIIs. By the end of the week, the index formed a small bearish 'rounding top' pattern that can trigger a correction.

Daily technical indicators are in overbought zones. MACD and RSI are showing upward momentum. ROC and Slow stochastic are showing slight downward momentum. ROC touched a lower top when the index touched a new high. Some near-term index consolidation or a pullback towards the down trend line is likely.

All three EMAs are rising, and the index is trading above them in a bull market. However, the index failed to close above its Jun 3 '19 life-time closing high of 40268 despite touching a new intra-day high of 40392. Bears may use the opportunity to launch an attack.

Profit booking can be expected when an index approaches a previous high. Investors remember what happened after the previous high was touched. Cautious optimism should be the key words here - not aggressive bullishness. 

NSE Nifty index chart pattern

The weekly bar chart pattern of Nifty closed convincingly above the (blue) down trend line on the back of strong FII buying. FIIs and DIIs had turned net sellers of equity a week ago, causing the index to pullback to the down trend line. Such pullbacks often provide buying opportunities.

However, the index is trading close to a lifetime high. It is a good idea to become fearful when everyone else is turning greedy. The weak macroeconomic indicators are suggesting that the market is running ahead of itself.

Weekly technical indicators are looking bullish and overbought. MACD and RSI are rising in their respective bullish zones. ROC and Slow stochastic are well inside their respective overbought zones. Some index consolidation or correction may be around the corner.

Nifty's TTM P/E has moved up to 27.47 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is treading water in neutral zone. Near-term index consolidation is a possibility. 

Bottomline? Sensex and Nifty charts appear to have reversed 5 months long down trends. A cut in corporate taxes leading to better Q2 earnings has boosted bullish sentiments. Topline growth is tepid, and macroeconomic indicators remain weak. Stay invested. If you must buy, pick market-leading large-cap stocks.

Gold and Silver charts: consolidating after upward breakouts

Gold chart pattern

The following comments appeared in the previous post on the daily bar chart pattern of Gold: "...the rally has been a bit too steep. Some profit booking is likely to emerge soon."

After a sharp upward breakout with good volume support above a 'Cup and Handle' pattern, gold's price twice tested the 1440 level - forming a small 'double top' reversal pattern.

A pullback towards the rising 20 day EMA and some sideways consolidation followed. Gold's price is trading above its three rising EMAs in a bull market.  

Daily technical indicators are correcting overbought conditions. MACD has crossed below its signal line inside its overbought zone. RSI has fallen from its overbought zone. Slow stochastic formed a 'double top' pattern before dropping from its overbought zone.

The US Dollar index dropped to a low of 95.36 on Jun 25, triggering the sharp rally in Gold's price. Since then, the Dollar Index has recovered smartly past 97 - keeping a lid on further upside in price.

On longer term weekly chart (not shown), gold’s price closed well above its three rising weekly EMAs in long-term bull territory. Weekly technical indicators are beginning to correct overbought conditions. Some more price consolidation or correction can follow.

Silver chart pattern

The following comments appeared in the previous post on the daily bar chart pattern of Silver: "Slow stochastic is consolidating at the edge of its overbought zone. Some price consolidation/correction can be expected."

Silver's price consolidated sideways above its 200 day EMA before forming a small 'double top' reversal pattern and corrected down to its 50 day EMA.

Daily technical indicators are turning bearish. MACD formed a small bearish 'rounding top' pattern and crossed below its signal line. RSI has dropped to seek support from its 50% level. Slow stochastic has slipped below its 50% level. Some more price correction or consolidation is likely.

On longer term weekly chart (not shown), silver's price closed at its 20 week EMA, but below its 50 week EMA and well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are looking bullish to neutral, but not showing any upward momentum. 

Sensex, Nifty charts (Jun 21, 2019): consolidating, but showing bearish reversal signs

FIIs were net buyers of equity on Tue. (Jun 18), but net sellers on the other four days. Their total net selling was worth Rs 15.7 Billion. DIIs were net sellers of equity on Wed. (Jun 19), but net buyers on the other four days. Their total net buying was worth Rs 30.2 Billion, as per provisional figures.

USA has warned that it would be compelled to take some "additional action" against India over "unfair" trade practices as the two countries have made "no headway" on these issues.

Sovereign Wealth funds and State Pension funds are piling into India, buying stakes in everything from airports to renewable energy, attracted by political stability, reforms and a growing middle class.

BSE Sensex index chart pattern

The daily bar chart pattern of Sensex consolidated sideways during the week - getting good support from its 50 day EMA - but lost about 250 points (0.6%) on a weekly closing basis. The index is trading well above its rising 200 day EMA in a bull market.

However, on the closing (line) chart (see below), the index had broken out below a small 'head and shoulders' reversal pattern (with purple neckline), followed by a pullback towards the purple neckline - and may be forming a larger complicated 'head and shoulders' pattern with a green neckline.

Why complicated? Because the 'head' of the larger 'head and shoulders' pattern is itself a 'head and shoulders' pattern. Note that the green neckline has not been breached yet. Bulls can be expected to put up a strong defense here.

What if the green neckline gets breached? The larger complicated 'head and shoulders' pattern will get technically confirmed. Sensex can then be expected to move down to test support from its rising 200 day EMA.  

Daily technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. ROC faced resistance from its '0' line and dropped back into bearish zone. RSI is below its 50% level. Slow stochastic has emerged weakly from its oversold zone. 

Some more correction, and a part or complete filling of 'Gap 2' (formed on May 20) may be on the cards.

Formation of a reversal pattern - specially one occurring near a lifetime high - should be treated with respect and caution. The up trend from the Oct '18 low and the bull market are intact. So, there is no need to sell in a panic. But buying can be restricted for the time being.

NSE Nifty index chart pattern

The weekly bar chart pattern of Nifty closed lower for the third week in a row as it dropped down to test support from the upward 'gap' formed on May 20. The index closed above its weekly EMAs in a bull market, but has formed a 'rounding top' reversal pattern.

Weekly technical indicators are looking bearish. MACD is about to fall from its overbought zone. ROC is below its 10 week MA and has fallen to its neutral zone. RSI and Slow stochastic have dropped from their respective overbought zones. Some more consolidation or correction is possible. 

After touching a high of 29.90 on Mon. Jun 3, Nifty's TTM P/E has moved down to 28.99, which is still well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has dropped sharply inside its oversold zone. Some near-term index upside or consolidation is likely.

Bottomline? Sensex and Nifty charts are consolidating after touching lifetime highs, but showing some bearish reversal signs. Any pre-budget rally can be used to book profits. Avoid the urge to do bottom fishing among small/mid caps.

Nifty chart: a midweek technical update (Jun 19, 2019)

FIIs were net buyers of equity on Tue. (Jun 18), but were net sellers on Mon. and Wed. (Jun 17 and 19). Their total net selling was worth about Rs 4 Billion. DIIs were net sellers of equity on Wed., but were net buyers on Mon. and Tue. Their total net buying was worth Rs 13.3 Billion, as per provisional figures.

According to data compiled by Bloomberg, India's non-bank finance companies (NBFCs) have a record Rs 1.1 Trillion of local currency bonds due next quarter. Refinancing the obligations may pose a challenge.

India recorded FDI inflow of US $61 Billion during FY 2017-18 against $60.2 Billion in FY 2016-17, according to the Ministry of Commerce & Industry.

Note the following comments from last week's technical update on the daily bar chart pattern of Nifty: "Charts don't 'like' unfilled gaps. Most gaps get filled sooner than later - though some gaps may never get filled. A part or complete filling of the May 20 'gap' will make the chart technically 'healthy', enabling the index to rise higher."

Nifty had formed a 165 points upward 'gap' on May 20, and rose to touch a lifetime high of 12103 on Jun 3. It has since corrected all the way down towards the 'gap'. 

The 50 day EMA has provided good support this week. The index continues to trade well above its rising 200 day EMA in a bull market.

A part or complete filling of the 'gap', followed by a resumption of the bull rally is the more likely Nifty direction. However, a remote bearish possibility should also be kept in mind: If Nifty forms a downward 'gap' and falls below the May 20 upward 'gap', a bearish 'island reversal' pattern will get formed.

Daily technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. (Note that the signal line has formed a bearish 'rounding top' pattern.) RSI is moving sideways below its 50% level. Slow stochastic has fallen inside its oversold zone, and can trigger an index pullback towards the 20 day EMA. 

Nifty's TTM P/E has moved down to 28.91, but remains in overbought zone and much higher than its long-term average. The breadth indicator NSE TRIN (not shown) has re-entered its oversold zone, hinting at some near-term index upside.

A delayed monsoon is adding to the growth woes of the economy. Some out-of-the box thinking and reform measures are required to push the economy back onto the growth track. But it may be better to have moderate expectations from the current regime.

Nifty chart: a midweek technical update (May 29, 2019)

FIIs were net buyers of equity on Mon. (May 27), but were net sellers during the next two days. Their total net buying was worth Rs 4.1 Billion. DIIs were net sellers of equity on Mon. and Wed. (May 29), but were net buyers on Tue. Their total net selling was worth Rs 2.5 Billion, as per provisional figures.

The 2nd NDA government has its task cut out as India is facing one of the worst job crisis in several decades. According to an analysis based on data from Centre for Monitoring Indian Economy (CMIE), nearly 5 million people lost their jobs during 2016-18.

According to an ICRA report which analysed the Q4 results of 300 odd companies, weakness in consumer spending and lower commodity prices have led to a revenue growth of 10.7% during Jan-Mar '19 - a 6-quarter low. 

After forming a 165 points upward 'gap' on May 20, the daily bar chart pattern of Nifty rose to touch a lifetime high of 12041 on May 23 (the day election results were announced). But it formed a large 'reversal day' bar (higher high, lower close), and dropped to test support from the 'gap' zone (shaded in grey).

Though the index bounced up, and touched a new closing high of 11929 on Tue. May 28, it has failed to test its May 23 top so far. The index is trading well above its three rising EMAs in a bull market - so rising to a new high may be just a matter of time.

Daily technical indicators are in bullish zones, but not showing much upward momentum. MACD is rising above its signal line in overbought zone. RSI is moving sideways above its 50% level, but appears to be forming a small 'rounding top' reversal pattern. Slow stochastic is moving sideways after re-entering its overbought zone. 

All three indicators continue to show negative divergences by failing to touch new highs with the index. Some consolidation or correction may follow.

Nifty's TTM P/E has moved up to 29.44, which is in overbought zone and much higher than its long-term average. The breadth indicator NSE TRIN (not shown) has fallen sharply from its oversold zone, hinting at some near-term consolidation.

A correction that partly or completely fills the May 20 'gap' will improve the technical 'health' of the chart, enabling Nifty to rise much higher. But corrections hardly ever happen if you wish for them.

There is a remote possibility of Nifty forming an 'island reversal' pattern - if it falls below the upward 'gap' of May 20 with a downward 'gap'. In such an unlikely event, the outcome will be very bearish. Not saying such a rare reversal pattern will actually form - but forewarned is forearmed.

S&P 500 and FTSE 100 charts (Mar 08, 2019): pullback rallies stall at resistance levels

S&P 500 index chart pattern

The following comment appeared in last week's post on the daily bar chart pattern of S&P 500: "...the index closed above its three weekly EMAs in a long-term bull market for the fifth week in a row, but has formed a long-legged doji candlestick pattern that can halt the rally."

On Mon. Mar 4, the index touched an intra-day high of 2817, but formed a 'reversal day' bar by closing below the resistance zone (between 2800 and 2825). That was just the excuse bears needed to swing into action.

The index corrected during the rest of the week, falling below its 20 day EMA but receiving support from its 50 day and 200 day EMAs. The 'golden cross' of the 50 day EMA above the 200 day EMA has not been a convincing one. The index lost 2.2% on a weekly closing basis.

Daily technical indicators are looking bearish after correcting overbought conditions. MACD is falling below its signal line in bullish zone. RSI is seeking support from its 50% level. Slow stochastic has fallen sharply below its 50% level. 

Signs of a global economic slowdown - if not a recession - and a not-so-great jobs report have taken the wind out of bullish sails. A possible fall below the 200 day EMA can lead to more correction.

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the sixth week in a row, but has formed a large 'reversal' bar (higher high, lower close) that can trigger a correction. 

Weekly MACD is in neutral zone. RSI has formed a small 'rounding top' reversal pattern and dropped towards its 50% level. Slow stochastic has started to correct inside its overbought zone.

FTSE 100 index chart pattern

The daily bar chart pattern of FTSE 100 rose to touch an intra-day high of 7212 on Wed. Mar 6, but fell short of testing resistance from its 200 day EMA. The index dropped to seek support from its rising 50 day EMA, and closed just above 7100 - losing only 2 points for the week.

Daily technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. RSI has again dropped to seek support from its 50% level. Stochastic is falling towards its oversold zone. 

The unresolved BrExit deal continues to affect bullish sentiments. The index can consolidate or correct some more. 

On longer term weekly chart (not shown), the index received support from its 20 week EMA but faced resistance from its 50 week EMA, and closed above its 200 week EMA in long-term bull territory. 

Weekly technical indicators are giving conflicting signals. MACD is rising above its signal line in bearish zone. RSI is seeking support from its 50% level. Stochastic has slipped down from its overbought zone.

S&P 500 and FTSE 100 charts (Mar 01, 2019): pullback rallies fail to overcome overhead resistances

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: "Some more consolidation can be expected before the index makes an attempt to cross above the resistance zone."

The index entered the resistance zone (between 2800 and 2825) On Mon. Feb 25 and touched an intra-day high of 2813, but dropped to close below 2800. Three days of consolidation with a downward bias followed, with the index touching an intra-day low of 2775 on Wed. Feb 27.

An upward bounce on Fri. Mar 1 - possibly because POTUS postponed increasing tariffs on Chinese goods - took the index to a close inside the resistance zone after 4 months, with a weekly gain of 0.4%.

Bears have managed to prevent the 'golden cross' of the 50 day EMA above the 200 day EMA for one more week by strongly defending the resistance zone. 

Daily technical indicators are looking overbought. MACD has slipped below its signal line (which appears to be forming a 'rounding top' reversal pattern) near the edge of its overbought zone. RSI continues to face resistance from the edge of its overbought zone. Slow stochastic has bounced up from the edge of its overbought zone. 

The index has taken more than two months to recover from three weeks of sharp correction in Dec '18. Some more consolidation is possible before the index can cross above the resistance zone. 

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the fifth week in a row, but has formed a long-legged doji candlestick pattern that can halt the rally. 

Weekly MACD has risen to its neutral zone. RSI is moving sideways above its 50% level. Slow stochastic is climbing inside its overbought zone, and can trigger a correction.

FTSE 100 index chart pattern

The daily bar chart pattern of FTSE 100 failed to overcome strong resistance from its 200 day EMA and corrected below its 20 day EMA. It touched the week's low of 7041 on Thu. Feb 28, but found support from its 50 day EMA.

A weak technical bounce on Fri. Mar 1 faced resistance from the 20 day EMA. The index managed to close just above 7100, with a 1% loss on a weekly closing basis. 

It was the second straight lower weekly close. Strong volumes on the three down days is a clear sign of bear domination. 

Daily technical indicators are looking bearish after correcting overbought conditions. MACD has formed a 'rounding top' reversal pattern and is falling below its signal line in bullish zone. RSI has dropped to seek support from its 50% level. Stochastic has emerged from its oversold zone. 

Uncertainty about a possible no-deal BrExit is affecting bullish sentiments. The index may consolidate some more. (At the time of writing this post, FTSE is trading about 16 points higher.)

On longer term weekly chart (not shown), the index closed above its 20 week and 200 week EMAs in long-term bull territory, but below its 50 week EMA. Weekly technical indicators are turning bearish. MACD is rising above its signal line in bearish zone. RSI has dropped to seek support from its 50% level. Stochastic has fallen down from its overbought zone.