Technical forecast for US stocks:
- Dow jones, S&P 500, Nasdaq 100 upside momentum fading
- Broader outlook remains neutral, with eyes on support ahead
- Technical highlights: Symmetrical triangle and Rising Wedge
Recommended by Daniel Dubrovsky
Get your free stock forecast
Dow Jones Outlook – Neutral
The Dow Jones remains in a consolidating setting, with prices unchanged since October’s uptrend flattened out. There seems to be a symmetrical triangle in the making since then. The direction of the breakout of the triangle may be the key for the upcoming trend. Immediate support is a combination of the floor of the triangle and the 23.6% Fibonacci retracement level at 33672. Confirmation of a breakout below the latter would open the door to a reversal of October’s uptrend, focusing on the 100-day simple moving average (SMA) and 31738 – 32017 support zone. On the other hand, turning higher focuses on the roof of the triangle and the December high at 35228.
Chart created in trading view
S&P 500 Outlook – Neutral
S&P 500 futures consolidated in the past week. By and large, the index continues to trade upwards within the confines of a Rising Wedge chart since October. The latter is a bearish formation. Breaking below the wedge could open the door to resuming the downtrend from August to October. Until then, prices can remain cautiously higher within the limits of the wedge. Immediate support is the 61.8% Fibonacci retracement level at 4012. Breaking down will provide an increasingly bearish outlook, focusing on the 100-day SMA. Otherwise, immediate resistance is the 78.6% level at 4150 before the roof of the wedge kicks in.
Trade smarter – Sign up for the DailyFX newsletter
Receive timely and compelling market commentary from the DailyFX team
subscribe to newsletter
Chart created in trading view
Nasdaq 100 Outlook – Neutral
The Nasdaq 100 is in a precarious position heading into the new week. On the daily chart below, prices broke below a near rising trend line from the beginning of this year. Confirmation is lacking, but further downside progress could offer an increasingly bearish trajectory, focusing on the 50-day SMA. Additionally, if you zoom in on the 4-hour chart, a bearish Double Top is also forming with prices testing the neck around 12339. As such, it will be key to see if the support can hold in the days ahead. Immediate resistance appears to be 12846 – 12987.
Chart created in trading view
— Posted by Daniel Dubrovsky, Senior Strategist for DailyFX.com
To contact Daniel, follow him on Twitter:@ddubrovskyFX
DailyFX provides currency news and technical analysis of the trends affecting the global currency markets.
