Sun, Feb 05, 2023 @ 17:29 GMT
HomeContributorsTechnical AnalysisUS 500 Stock Index Rebounds Sharply, But Outlook Still Negative

US 500 Stock Index Rebounds Sharply, But Outlook Still Negative

The US 500 stock index posted sizeable gains on Wednesday, after it touched its lowest level since April 2017. Notwithstanding the latest rebound, considering that the price structure on the daily chart consists of lower lows, and that the 50-day simple moving average (SMA) remains firmly below the 200-day one, the bigger picture is still negative.

Short-term oscillators support the notion, as the RSI is pointing down and looks to be headed for a test of its oversold 30 level soon, while the MACD – already negative – rests below its red trigger line.

A fresh wave of declines may stall initially near 2,332, the 1½-year low reached on December 26. A downside violation would mark a fresh low, possibly opening the way for a test of 2,230, this being the bottom of December 30, 2016. Even steeper bearish extensions may encounter support around 2,178, the trough of December 5, 2016.

On the upside, resistance to further recovery may come around the December 26 peak of 2,478. If the bulls pierce above it, the next obstacle could be the 2,582 zone, defined by the lows of December 10, before the December 6 trough of 2,620 comes into view.

Summarizing, the broader outlook still seems decisively bearish.
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading