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Technical Update: US Equity Indices

Dow Jones Industrial Average [DJI30]

With Trump victory boosting equity investors' confidence, the Down Jones Industrial Average (DJI30) rallied to record high of 18972, the gauge presently confronts 61.8% FE of its 2012-15 upside, at 18910. Given the index manage to surpass the same expansion level on a weekly closing basis, it becomes capable enough to please Bulls with 19000, 19500 and the 20000 psychological magnet; however, resistance-line of a broad ascending trend-channel resistance, at 20600, may curb its additional upside, failing to which could flash 21160 mark, comprising 100% FE on the chart. Meanwhile, 18670 and the 18200 are likely nearby supports that the index might witness during its pullback, breaking which can extend profit-booking moves to witness 17900 and the 17480. Given the bears govern prices below 17480, the 16750 and the channel-support of 16480 are important supports to watch, which if broken could trigger the gauge's fresh south-run towards 15650 support mark.

S&P 500 [SP500]

Unlike DJI30, which already marked the highs, SP500 presently struggles to clear 2187-93 horizontal-resistance and the overbought RSI signals brighter chances of a pullback towards 2170 and the 100-day SMA level of 2156. In case if the index drops below 2156, it becomes weaker to test 2135 and 2120 supports; however, 23.6% Fibonacci Retracement of its February – August up-move, coupled with 200-day SMA, could limit further price-drop around 2100 round figure. Alternatively, a daily break of 2193 enables the equity benchmark to aim for 61.8% FE level of 2272 with 2200 and the 2250 acting as intermediate halts. Should the prices rally beyond 2272, it becomes wise to expect 2300 round figure resistance.

Nasdaq [NQ100]

The Nasdaq, which has been rising since last three-days, presently finds it difficult to clear 4835-37 resistance-zone, which if cleared enables the gauge to test 4850 and the 4890 resistance levels. Should the index manage to surpass 4890, the 4900 round figure and October high around 4925 can please buyers. On the downside, 4785 and the 100-day SMA level of 4762 can come-up on the chart during its reversal. Given the gauge continue declining below 4762, the 4715 and the 4675 are likely downside numbers to entertain the Bears.

Cheers and Safe Trading,

Anil Panchal