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US Equity Indices - Technical Update

On the back of two consecutive weeks of decline and after witnessing a choppy week on the back of the FOMC statement, all the major US equity indices are poised for a weekly gain. Although the Federal Reserve dropped the phrase "patient" from its monetary policy statement, the US equity markets are enjoying the central banks dovish economic outlook.

ALSO READ: FOMC Triggers Volatility

Given the backdrop, here is a technical update for important US equity indices, namely - Dow Jones Industrial Average, S&P 500 and Nasdaq 100.

Dow Jones [DJI30]

As is visible on 4-hourly chart, the index is currently trading within a short-term ascending trend-channel, indicating the possibilities of further up-move from current levels. Hence, a sustained move above 18,100 now seems to trigger the required momentum to lift the index back towards 18,280-300 immediate resistance, the recent highs tested during early March, and eventually towards 18,580-18,600 resistance area marking the upper trend-line resistance of the short-term ascending channel. However, should the index fail to clear 18,100 resistance and drop back below 17,920-900 immediate support, it could possibly drop back towards testing the lower trend-line support of the channel, currently near 17,700 level. Further, a break below 17,000 mark and a subsequent drop below March lows support near 17,660-50 zone now seems to accelerate the downfall towards 17,300-280 support area.

S&P 500 [SP500]

Similarly, the S&P 500 remains in an up-trend and is now very close to its recent highs resistance near 2120-25 zone. A move above recent highs is likely to confront immediate resistance near 2160-70 area, marked by the upper trend-line resistance of a well-established ascending trend-channel formation on weekly chart. Alternatively, reversal from 2100 mark and a subsequent break below 2050-40 immediate support now seems to trigger some near-term corrective move immediate towards 2000 psychological mark support and eventually towards a very important support near 1970 region, marking 2015 lows. Furthermore, on decisively breaking below 2015 lows the index might witness some additional near-term weakness towards testing another strong support near 1925-20 area, representing the lower trend-line support of the channel.

Nasdaq 100 [NQ100]

This week, the index has outperformed the other two major indices and is now within striking distance of re-testing the record high levels. A move above its recent highs now seems to provide the required boost for the index to continue its appreciating move towards testing 61.8% Fib. expansion level resistance near 4530 area. On the downside, 4440-20 area now seems to protect immediate downside, which if broken could drag the index further towards 4360-40 support area and eventually towards 4300 strong support area, marked by 50-day SMA. Failure to hold immediate support levels and a subsequent drop below 50-day SMA might trigger an extended corrective move towards testing the very important psychological mark support near 4010-4000 zone.

Haresh Menghani
Senior Market Analyst
Admiral Markets
 
At any use of the analytical material taken from the site of company Admiral Markets, and the secondary publication on any other resources, the rights to intellectual property for a dealing center «Admiral Markets», reference to the company site is obligatory.

Follow me on twitter @Fx_Haresh for latest market updates



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