Weekly Technical Outlook on Major Stock Indices: Further rally before risk of correction as G20 looms

Your weekly dose of key technical charts on S&P 500, Nikkei 225, Hang Seng, ASX 200 & DAX.

S&P 500 – Further push up towards 3045 key resistance before risk of correction



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Key Levels (1 to 3 weeks)

Intermediate support: 2930

Pivot (key support): 2900

Resistances: 3003 & 3045 (Fibonacci expansions)

Next supports: 2840 & 2800

Medium-term (1 to 3 weeks) Outlook

The SP 500 Index (proxy for the S&P 500 futures) had staged the expected rally and hit the target/all-time high area zone of 2959. It printed a fresh all-time high of 2964 post FOMC on 21 Jun 2019, click here for a recap on our previous report.

The medium-term uptrend in place since 03 Jun 2019 remains intact but the risk of a minor corrective sequence (3% to 5% decline) has increased at this juncture. The daily RSI oscillator is now coming close to a significant overbought level of 73 that has coincided with previous significant price action corrections seen in Sep 2018 and May 2019. Also, the 3045 Fibonacci expansion level also confluences with the upper boundary of an impending “Expanding Wedge” bearish topping configuration in place since Feb 2018.

We maintain the bullish bias in any dips above a tightened key medium-term pivotal support set for this week at 2900 for a further potential push up to target 3003 and 3045 next. However, a break with a daily close below 2900 invalidates the bullish scenario to kick start the minor corrective decline sequence towards the next support at 28400 and even 2800 (61.8% Fibonacci retracement of the recent rally from 03 Jun 2019 low to 21 Jun 2019 high).          

Nikkei 225 – Potential residual push up within corrective rebound sequence



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Key Levels (1 to 3 weeks)

Intermediate support: 21170

Pivot (key support): 20900

Resistances: 21600 & 21900

Next support: 20290/185

Medium-term (1 to 3 weeks) Outlook

The Japan 225 Index (proxy for the Nikkei 225 futures) has staged the expected push up and hit the first target/resistance at 21600 (print a high of 21631 on 20 Jun 2019). No change in key technical elements, maintain the bullish bias with 20900 as the key medium-term pivotal support for a further potential residual push up to retest 21600 before targeting 21900 next (also the upper boundary of the ascending channel from 03 Jun 2019 low & 76.4% Fibonacci retracement of the decline from 03 May high to 03 Jun 2019 low).

However, a break with a daily close below 20800 invalidates the corrective rebound scenario to for a deeper slide towards the next support at 20290/185.

Hang Seng – Bears in hibernation mode



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Key Levels (1 to 3 weeks)

Intermediate support: 28300

Pivot (key support): 28000

Resistances: 29000 & 29500

Next support: 26700

Medium-term (1 to 3 weeks) Outlook

The Hong Kong 50 Index (proxy for Hang Seng Index futures) has staged a bullish breakout above the 28000 upper limit of the neutrality zone on 19 Jun as per highlighted in our previous report.

In addition, the daily RSI oscillator has moved back above the 50 level which reinforces the revival of medium-term upside momentum. We flip back to a bullish bias in any dips above the 28000 key medium-term pivotal support for a further potential push up to target the next resistances at 2900 and 29500 (also the gapped down formed at 03/06 May 2019 & 61.8%/76.4% Fibonacci retracement of the recent slide from 03 May high to 04 Jun 2019 low).

However, a break with a daily close below 28000 invalidates the bullish scenario for slide back to towards the recent swing low of 26700 that has formed in the aftermath of the recent domestic street protests over the China extradition bill.

ASX 200 – Further potential push up to retest Oct 2007 all-time high



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Key Levels (1 to 3 weeks)

Intermediate support: 6590

Pivot (key support): 6525

Resistance: 6815/6850

Next support: 6380

Medium-term (1 to 3 weeks) Outlook

The Australia 200 Index (proxy for the ASX 200 futures) has continued to surge upwards and hit the expected target/resistance of 6630 (printed a high of 6703 on 20 Jun).

No clears signs of bullish exhaustion yet, we maintain the bullish bias in any dips above the adjusted key medium-term pivotal support 6525 for a further potential push up to target the current all-time high area of 6815/850 (also a Fibonacci expansion cluster).

However, a break with a daily close below 6525 invalidates the bearish scenario to kickstart a minor corrective decline sequence towards the next support at 6380

DAX – Further potential push up above 12180 key support

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Key Levels (1 to 3 weeks)

Pivot (key support): 12180

Resistances: 12450 & 12615 (Fibonacci expansion)

Next support: 11900/800

Medium-term (1 to 3 weeks) Outlook

The Germany 30 Index (proxy for the DAX futures) has continued to surge higher as expected and almost hit the target/resistance of 12450 (printed a high of 12440 on 20 Jun 2019).

Key technical elements remain positive, thus maintain the bullish bias with a tightened key medium-term pivotal support set for this week at 12180 (also the lower boundary of the ascending channel from 03 Jun 2019 low) for a further potential push up to target the ascending channel resistance at 12615 in the first step (also 1.00 Fibonacci expansion of the recent rally from 03 Jun low to 11 Jun high projected from 18 Jun 2019 low).

However, a break with a daily close below 12180 negates the bullish scenario for a deeper slide to retest the major support zone of 11900/800.   

Charts are from City Index Advantage TraderPro




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