Daily Stock Indices Technical Trend Bias/Key Levels (Fri 15 Feb)

S&P 500 downside reversal risk increases.

Stock Indices (CFD) – Risk of downside reversal in S&P 500

  • US SP 500 – Trend bias: At risk of minor downside reversal. The Index has stage a 1.1% slide from yesterday, 14 Feb European session high of 2762 (recalled that 2762 was the intermediate resistance/target we set from our previous report in on-going extended rally which was met on Wed, 13 Feb) to challenge the tightened key short-term support at 2732 (printed an intraday low of 2729 in yesterday, 14 Feb U.S session before an hourly close above 2732). Thereafter, it traded sideways and ended the U.S. session at 2745 (back at the 200-day MA). Even though yesterday’s price action has managed to hold at the 2732 key short-term support, bullish technical elements have started to deteriorate where the Index has formed two consecutive daily “Doji” candlestick patterns since  13 Feb 2019 after a strong push up on Tues, 12 Feb 2019 (reinforced by optimistic news flows on U.S./China trade talks that were going smoothly & the risk of another U.S. government shutdown had diminished). The daily RSI oscillator has started to flash a bearish divergence signal near its overbought region after the close of yesterday, 14 Feb U.S. session. In addition, the price action has broken below the minor ascending channel support from 08 Feb 2019 low, it retested the pull-back resistance of the former minor ascending channel support at 2758 before it inched down lower into the close of yesterday U.S. session. Therefore, the conviction to stage a further push up towards 2775/80 has been reduced. Prefer to turn neutral between 2762 and 2732. An hourly close below 2732 triggers at least a minor downside move to target the next near-term support at 2681/78 in the first step (23.6% Fibonacci retracement of the entire rally from 26 Dec 2018 low to 2762 recent high + swing low area of 08 Feb 2019 that was a previous minor range resistance on 18/25 Jan 2019).
  • Japan 225 – Trend bias: At risk of minor downside reversal. The Index has started to reversed down and reintegrated back below the former 21020 key medium-term pivotal resistance. The on-going lacklustre price action has reacted off the pull-back resistance of the former “Descending Wedge”  support from 26 Dec 2018 low coupled with the daily RSI oscillator that has reversed down from a significant corresponding resistance at the 60 level. Therefore, the recent break above 21020 on 13 Feb 2019 seems to be a failure bullish breakout. Flip to bearish bias below 21260 (14 Feb 2019 minor swing high) for a further potential slide to retest the 20200 key medium-term downside trigger (08/11 Feb 2019 swing low that was a former resistance on  27 Dec 2018). On the other hand, a break above 21260 reinstates the bulls for a push up to target the next intermediate resistance at 21420 (Fibonacci expansion cluster).
  • Hong Kong 50 - Trend bias: At risk of minor downside reversal. The Index has opened lower in today, 15 Feb Asian session where it has reintegrated back at 28000/215 key medium-term resistance (also the upper boundary of the “Expanding Wedge” range configuration in place since 26 Oct 2018 low of 24487 & the major descending trendline resistance from its all-time high level of 33530 printed on 29 Jan 2018). In addition, the daily RSI oscillator has started to reverse down after a test on its corresponding significant resistance on the 65/70 level. Therefore, the recent push up seen on 13 Feb 2019 seems to be a failure bullish breakout. Prefer to turn neutral first between 28400 and 28000. An hourly close below 28000 triggers a potential slide towards 27300/200 near-term support (the former swing high area of 03 Dec 2018) in the first step. On the other hand, a break above 28400 reinstates the bulls for a push up to target next intermediate resistance at 28660/770 (Fibonacci expansion cluster).  
  • Australia 200 - Trend bias: Push down within range. No change, maintain bearish bias below 6107 key short-term resistance for a further potential slide to test the 5955 near-term support (the minor ascending trendline from 02 Jan 2019 low + former range resistance from 17 Oct/12 Nov 2018 high). However, a break above 6107 sees a further squeeze up towards the 6150/200 key long-term pivotal resistance.
  • Germany 30 – Trend bias: Push down within range. Another “failure pop” above the 11205 key short-term resistance where it printed a high of 11265 in yesterday, 14 Feb European opening session before it reversed down swiftly below 11205. Thereafter, it continued to inch lower in the U.S. session and printed a low of 11077 which was close to the near-term support/target of 11045/10960 as per highlighted in our previous reports. No clear signs of a bullish reversal at this juncture. Maintain bearish bias in any bounces (as the 1-hour Stochastic oscillator has reached an extreme oversold level) below the 11205 key short-term resistance for a further slide towards 11045/10960 and the next minor support at 10860 (08 Feb 2019 swing low). On the other hand, an hourly close above 11205 invalidates the bearish scenario for a further squeeze up towards 11310 and even the lower limit of the key medium-term pivotal resistance zone at 11390.                                                    
           

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.