HomeContributorsTechnical AnalysisUS 500 Index Retreats from Record High

US 500 Index Retreats from Record High

  • US 500 faces downside pressures for the second consecutive day
  • More weakness possible, but key support levels are nearby

The US 500 stock index (cash) opened negative on Tuesday, strengthening its negative momentum towards its 20-day exponential moving average (EMA), which has been buffering downside movements since the start of the year, around 5,185.

With the RSI marking a new low below an important support area and the stochastic oscillator decelerating, the odds for a bearish impulse have increased.

If the bears stay in charge, the ascending trendline, which connects the December 2022 and July 2023 highs, could add some footing around the 5,130 level ahead of the 50-day EMA at 5,065. The 5,000 round mark, which overlaps with the 23.6% Fibonacci retracement of the ongoing rally, could be the next destination on the downside. Should selling forces breach that floor too, the door will open for the 100-day EMA at 4,900.

On the upside, the price will have to run above the resistance trendline at 5,320 in order to reach the ascending trendline at 5,453. There might be another obstacle around 5,530 before the 5,600 psychological level comes into view.

In a nutshell, the positive trend in the US 500 stock index is still intact, though given the discouraging short-term signals, the current weakness in the price could persist. 

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