Dow Jones, S&P 500, Nasdaq 100 Technical Outlook: Will Key Support Levels Hold?
US Equities Technical Forecast:
- Dow Jones, S&P 500, Nasdaq 100 upside momentum fading
- Broader outlooks remain neutral, with eyes on support ahead
- Technical highlights: Symmetrical Triangle and Rising Wedge
Dow Jones Outlook - Neutral
The Dow Jones remains in a consolidative setting, with prices unchanged since October’s uptrend leveled off. There appears to be a Symmetrical Triangle brewing since then. The direction of the triangle’s breakout could be key for the coming trend. Immediate support is a combination of the triangle’s floor and the 23.6% Fibonacci retracement level at 33672. Confirming a breakout under the latter would open the door to reversing October’s uptrend, placing the focus on the 100-day Simple Moving Average (SMA) and the 31738 – 32017 support zone. On the other hand, turning higher places the focus on the triangle’s ceiling and the December high of 35228.
S&P 500 Outlook - Neutral
S&P 500 futures consolidated this past week. Broadly speaking, the index continues to trade upward within the boundaries of a Rising Wedge chart pattern since October. The latter is a bearish formation. Breaking under the wedge could open the door to resuming the downtrend from August through October. Until then, prices may remain pointed cautiously higher within the boundaries of the wedge. Immediate support is the 61.8% Fibonacci retracement level at 4012. Breaking lower would offer an increasingly bearish outlook, placing the focus on the 100-day SMA. Otherwise, immediate resistance is the 78.6% level at 4150 before the ceiling of the wedge kicks in.
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Nasdaq 100 Outlook - Neutral
The Nasdaq 100 is sitting in a precarious position heading into the new week. On the daily chart below, prices broke under a near-term rising trendline from the beginning of this year. Confirmation is lacking, but further downside progress could offer an increasingly bearish trajectory, placing the focus on the 50-day SMA. In addition, if you zoom in on the 4-hour chart, a bearish Double Top is also forming with prices testing the neckline around 12339. As such, it will be key to watch if support can hold in the days ahead. Immediate resistance appears to be the 12846 – 12987.
--- Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com
To contact Daniel, follow him on Twitter:@ddubrovskyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.