S&P 500 and FTSE 100 charts (Apr 26, 2019): bulls on top, but bears still offering resistance


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S&P 500 index chart pattern

The following remark was made in last week’s post on the daily bar chart pattern of S&P 500: For the past seven weeks, the index is trading within a ‘rising wedge’ pattern, from which a downward breakout is likely.”

There was no breakout in the week gone by, as the index kept rising along the upper edge of the ‘wedge’. The rally stopped just a point short of the lifetime high of 2941 touched on Sep 21 ’18.

Some hesitation and profit booking can be expected near a previous top. Whether that would lead to a breach of the twin support from the rising 20 day EMA and the lower edge of the ‘wedge’ remains to be seen.

Can the index form a ‘double top’ reversal pattern? Seems unlikely, but the possibility can’t be ruled out.

Daily technical indicators are looking bullish and overbought, but not showing much upward momentum. MACD is moving sideways after merging with its signal line. RSI has re-entered its overbought zone after a brief slip below it. Slow stochastic has bounced up from the edge of its overbought zone. 

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

On longer term weekly chart (not shown), the index closed well above its three weekly EMAs in a long-term bull marketWeekly MACD is rising above its signal line in overbought zone. RSI is rising above its 50% level. Slow stochastic is well inside its overbought zone.

FTSE 100 index chart pattern


After a long Easter break, the daily bar chart pattern of FTSE 100 touched a high of 7529 on Tue. Apr 23, but failed to sustain above the 7500 level for the rest of the week.

Profit booking dropped the index towards its 20 day EMA, where it has received some support. Despite the correction, the index continues to trade well above its 200 day EMA in a bull market.

Daily technical indicators are looking bearish. MACD has crossed below its signal line in bullish zone. RSI is falling towards its 50% level. Stochastic has dropped to the edge of its oversold zone, and can trigger a technical bounce.

The index has formed a large bullish ’rounding bottom’ pattern, which is more clearly visible on the 50 day EMA. Much higher levels (above 8000) are likely in the medium term.

On longer term weekly chart (not shown), the index closed well above its three weekly EMAs in long-term bull territory. Weekly technical indicators are in bullish zones. MACD is rising above its signal line. RSI is above its 50% level but showing slight downward momentumStochastic is correcting inside its overbought zone.

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