Quarterly Outlook
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Chief Investment Strategist
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Technical Update - Nasdaq and S&P 500. Short-term correction in the cards but bullish picture likely to continue next 2-3 months
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: Nasdaq 100/USNAS100 cfd and S&P 500/US500 cfd uptrends are stretched short-term and a minor correction should be expected.
15,265 resistance key for Nasdaq 100 and 4,546 for S&P 500. Indicators are suggesting the levels will be broken with the bullish scenario to continue for another 2-3 months
USNAS100 and US500 cfd short-term charts and key levels included in the article
Nasdaq 100 peeped just above strong resistance at around 15,265 to close below (see weekly chart below). The uptrend is a bit stretched as indicated with RSI being above 70 on both daily and weekly time period meaning the Index is ripe for a correction.
A correction that could take the Index down to the 0.382 retracement at around 14,300 possibly testing the lower rising trendline before buyers are likely to take back control. However, if buyers take back control before Nasdaq 100 reaches 14,300 is will be a sign of strength.
There is no divergence on RSI on daily and weekly meaning Nasdaq is likely to climb higher after a minor correction. The resistance at 15,265 is key!
A close above will pave the way for further upside towards all-time highs.
A daily close below 14,280 could lead to a larger correction down to 13,697 – 16,520
Medium- to longer term: A monthly close above 15,265 Nasdaq 100 and monthly RSI closes above 60 threshold we are very likely to see the Index being bullish until August or September. Possibly testing or making a new all-time high during that time.
USNAS100 cfd: A break below upper short-term rising trendline could lead to a sell off down to around 14,200. Trend is still up until a close below 14,190.
S&P 500 has no strong resistance until around 4,546, but a correction over the next couple of days should still be expected. A correction that could take the Index to test the lower rising trendline and the 0.382 retracement at around 4,315. However, buyers could cut the correction short at the minor support at around 4,352.
There is no RSI divergence on daily and weekly suggesting higher Index levels (after a likely correction). Medium-term uptrend is intact unless S&P 500 closes below 4,048. A close below 4,048 will demolish the bullish picture.
The monthly chart is showing RSI divergence but if RSI closes above 60 threshold it will support higher Index levels. A close above its (RSI) falling trendline will further add to the bullish scenario next 2-3 months with S&P 500 likely to test all-time highs August-September.
US500 cfd: A close below the upper short-term rising trendline is likely to lead to a sell off down to support at around 4,266. However, sell-off could be cut short at the 0.382 retracement at 4,315 with buyers taking back control
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