The US 100 index is 2.5% down from the week’s high of 7,037.10 hit on Monday which also constituted the highest on record for the benchmark. During Friday’s trading it touched 6,849.60, this being an 11-day low, while it continues trading in proximity to this level.
The RSI has been falling in recent days, hinting to a change in short-term dynamics from bullish to bearish. Turning to the stochastics, they’re giving a bearish signal in the very short-term as the %K line has crossed below the slow %D one, with both lines heading lower.
Should the index extend its losses, the area around the middle Bollinger line – a 20-day moving average line – at 6,840.75 could offer support. Price action is currently taking place not far above this level, with a decline shifting the focus to the lower Bollinger band and the 50-day moving average at 6,624.39 and 6,587.11 respectively, while the 6,800 handle before – a level of potential psychological significance – could also provide some support.
On the upside, the range around the all-time high of 7,037.10 from earlier in the week (including the 7,000 mark) might act as a barrier to the upside. Notice that the upper Bollinger band roughly coincides with this level as well. The 6,900 handle which was violated on the way down earlier in the day may instead offer resistance on the way up before the pair eyes its record high.
Despite the short-term pullback, the medium-term picture remains clearly bullish. The index is in an uptrend, with price action taking place above the 50- and 100-day MAs and both MAs continuing to head higher.
Overall, there are bearish signals in the short- and very short-term, while the medium-term picture is still bullish.
