S&P 500 and FTSE 100 charts (Apr 12, 2019): bulls trying to wrest control

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S&P 500 index chart pattern

The daily bar chart pattern of S&P 500 consolidated sideways within a 27 points range during the first four trading days, but formed an upward ‘gap’ to close above the 2900 level on Fri. Apr 12.

It was the first close above 2900 in more than 6 months. A new high is now within handshaking distance. But bears are still not ready to throw in the towel.

Trading pattern during the past 6 weeks has formed a bearish ‘rising wedge’ from which a downward breakout is likely. A correction will improve the technical ‘health’ of the chart – enabling the index to rise to a new high.

Daily technical indicators are looking bullish and overbought. MACD is moving sideways above its signal line. RSI is making another attempt to enter its overbought zone. Slow stochastic is well inside its overbought zone. 

All three EMAs are rising and the index is trading well above them in a bull market. However, negative divergences visible on all three indicators – which failed to rise to new highs with the index – can trigger some correction or consolidation.

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market for the 11th week in a rowWeekly MACD is rising above its signal line bullish zone. RSI is moving up above its 50% level. Slow stochastic is well inside its overbought zone.

FTSE 100 index chart pattern

The daily bar chart pattern of FTSE 100 consolidated sideways during the week. The possibility was mentioned in last week’s post.

The index touched the week’s high of 7478 on Tue. Apr 9, but formed a ‘reversal day’ bar (higher high, lower close)  that triggered a mini correction towards the rising 20 day EMA on Thu. Apr 11.

A bounce up on Fri. Apr 12 to a close at 7437 could not prevent FTSE from sustaining a 10 points loss for the week. However, the ‘golden cross’ of the 50 day EMA above the 200 day EMA has technically confirmed a return to a bull market.

Daily technical indicators are in bullish zones but not showing much upward momentum. MACD is sliding down towards its rising signal line. RSI remains below the edge of its overbought zone. Stochastic is inside its overbought zone. Some more consolidation is possible.

The BrExit ‘can’ has been kicked down the road. Since UK will now remain in the EU till Oct 31st, they will participate in the European parliamentary elections next month. This uncomfortable reality is dawning on Europeans. 

On longer term weekly chart (not shown), the index closed above its three weekly EMAs in long-term bull territory for the fourth straight week. Weekly technical indicators are looking bullish. MACD is rising above its signal line in bullish zone. RSI is rising towards its overbought zoneStochastic is well inside its overbought zone.

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