Technical Analyst, Saxo Bank Group
Summary: US main Indices on a knife's edge: S&P 500 rejected at key gap resistance
Nasdaq 100 likely to be rejected at falling trendline
Indicator points to a correction
S&P 500 Friday tested the lower band of the Gap area at 4,375 and the Cloud (shaded area). RSI closed just below 60 threshold (circled). That means a set-back could be seen.
For S&P 500 to confirm a bullish trend a close above 4,400 is needed as well as an RSI close above 60.
A close above 4400 will pave the way higher towards 4,540 going into the end of the year.
However, if RSI is not closing above3 60 threshold a 0.382 retracement to around 4,270 seems likely. Nasdaq 100 seems to be running out of steam just below the upper falling trendline. RSI closed just below 60 threshold (circled). That means a correction lower could be seen.
A correction down to the 0.382 retracement and support at around 14,781-14,733 is in the cards
However, if Nasdaq manages to close above its falling trendline and close above the cloud, and RSI is closing above 60 threshold next resistance at around 15,561 is likely to be reached, but there could be further upside potential to 16K.
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