The US 500 stock index eased below the five-month high of 2863 but retains bullish action as it holds above the 50- and 200-day simple moving averages (SMAs) which are ready to post a ‘golden cross’. Looking at momentum oscillators in the daily chart though, they suggest upside movements may be on the cards. The RSI is above its neutral 50 line, while the stochastic reversed higher before touching the oversold zone.
In case of further gains, the next resistance would likely be faced around the 2863 barrier, taken from the inside swing bottom on September 7 and from the latest highs. A jump above this region would increase positive sentiment until the all-time high of 2940, returning the medium-term outlook back to bullish.
On the other side, if the price loses momentum and retreats below the moving averages it could find support at the 23.6% Fibonacci retracement level of the upleg from 2332 to 2863, near 2735. Dropping below this area could take prices towards the immediate support of 2723 and then could open the door for the 2675 barrier.
In the medium-term, the index is trying to switch the neutral mode to a more bullish one and this would happen if prices surpass the all-time high set in September 2018.