S&P500 Index has has so far successfully survived the 10-yr long bull trend. This is certainly one of the longest lasting and surviving bull trend in the history of US Stock Markets. The study of long term Weekly Charts of S&P500 Index however throws up some points that warrant our attention. These technical development also raise our caution levels with regard to the current structure of the technical charts.
If we examine the above Weekly Chart of S&P500, it is evident that the uptrend that began in 2009 still remains intact and the upward rising channel which is now 10-YR long has not shown any structural breach. However, at current juncture, few technical factors raise some caution with regard to the immediate trend of this Index going forward.
If we look at the upward rising channel, the S&P 500 made first attempt to break out of that channel as it marked a high of 2872. It retraced back inside the channel and made yet another attempt to break out as it marked a higher high at 2929. This level, or the new high of 2929, came with a very explicit bearish divergence on the RSI which did not form a new high along with the Index. It distinctly formed a lower top and is seen doing so and inch lower. The Index crawled back in the trading range and the upward rising channel again.
Going ahead, it breached its 50-Week MA which is presently at 2757. Even after the present pullback, the Index still trades lower than its 50-Week MA after marking a lower top. Any pullback will find resistance at this 50-Week MA of 2757 and the 2820 level which happens to be the upper rising trend line of the present channel. This zone of 2757-2820 is expected to remain turbulent for the S&P500 Index in the immediate short term.The above references the authors opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
Milan Vaishnav, CMT, MSTA is a qualified Independent Technical Research Analyst at his Research Firm, Gemstone Equity Research & Advisory Services in Vadodara, India. As a Consulting Technical Research Analyst and with his experience in the Indian Capital Markets of over 15 years, he has been delivering premium India-focused Independent Technical Research to the Clients. He presently contributes on a daily basis to ET Markets and The Economic Times of India. He also authors one of the India’s most accurate “Daily / Weekly Market Outlook” — A Daily / Weekly Newsletter, currently in its 15th year of publication