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Technical Update - S&P 500 and Nasdaq 100 correction over. 3-5% downside potential

Technical Update - S&P 500 and Nasdaq 100 correction over. 3-5% downside potential

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

  • US equities are resuming bearish trend supported by technical indicators
  • S&P 500 key support at 4,953. Could sell-off down to 4,845-4,800

  • Nasdaq 100 rejected at key resistance level. Could sell-off down to around 16,549-16,276

  • US500 and USNAS100 CFD levels in the text below

S&P 500 was rejected at the 55 daily Moving Average and seems likely to resume its downtrend.

The strength indicator, RSI, is still showing negative sentiment, and a close back below the 40 threshold will further confirm this.

Key strong support is around 4,953. A daily close below this level is likely to lead to a sell-off down to the 4,845-4,800 area.

For S&P 500 to establish a bullish trend, a daily close above 5,146 is required.

sp500 d 0105
US500 CFD levels were rejected at the 55 DMA and are likely to sell off down to key support around 4,919.
A break below could result in further selling down to between 4,841 and 4,973.

To reverse this bearish picture, a daily close above 5,143 is required
sp500 d 0105

Nasdaq 100 was rejected at the resistance around 17,808 and closed Tuesday below both the Cloud and the 100 daily Moving Average.

The strength indicator, RSI, is still showing negative sentiment, and a close back below the 40 threshold will further confirm Nasdaq’s bearish trend.

This bearish trend could take the index down to strong support around 16,963.
A daily close below this level is likely to lead to an increased sell-off down to around 16,276.

To demolish this bearish scenario, a close above 17,808 is a minimum requirement. To establish a bullish trend, a close back above the Cloud (shaded area) is needed.

nasdaq100 d 0105
USNAS100 CFD was rejected at 17,780 and is now back below the Cloud.
The RSI is showing negative sentiment, supporting the bearish view that can take USNAS 100 down to around 16,549 support.

A daily close above 17,780 will place USNAS100 in a neutral position.
For a bullish trend, a close above 18,000 and back above the Cloud is required.
usnas d 0105

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