The US 100 index is currently trading close to its all-time high of 6,844.45 hit during Friday’s trading.
Rising prices in recent weeks are setting a bullish picture for the index in the short-term. The RSI, which has been heading higher throughout this period, is supporting the view for a positive market bias. The indicator though has crossed above the 70 overbought level; this being interpreted as increased risk for a pullback in the short-term.
The area around last week’s record high of 6,844.45 could be providing some resistance at the moment, with a break above shifting the attention to the range around the upper Bollinger band at 6,931.68 as another potential barrier to the upside. In case of stronger bullish movement, the focus would turn to the 7,000 mark.
On the downside, the area around the middle Bollinger line – a 20-day moving average line – at 6,637.70 might act as support in case of declines. Before reaching this level, several round marks – for example the 6,700 and 6,800 handles – have the capacity to act as potential psychological support.
The medium-term outlook is bullish: the index is in an uptrend with price action taking place above the 50- and 100-day MAs and both MAs maintaining a positive slope.
Overall, the short-term momentum is positive with perhaps a warning sign given by an overbought RSI, while the medium-term picture is clearly bullish.
