Weekly Technical Outlook on Major Stock Indices 19 Mar to 23 Mar 2018

S&P 500 – Mix elements with the risk of shaping a further decline within bullish consolidation/range configuration

Key Levels (1 to 3 weeks)

Resistances: 2800 & 2870/77

Supports 2733, 2660 & 2600

Medium-term (1 to 3 weeks) Outlook

Since its 10% recovery from the 2540/30 major support zone (long-term pivotal support), the recent 5 weeks of up move of the U.S. SP 500 Index (proxy for the S&P 500 futures)  has stalled below 2800 with the daily RSI oscillator that has started to inch downwards from a corresponding pull-back resistance at the 60% level.

These observation suggests that the medium-term upside momentum of the Index has abated and it faces the risk of a downward choppy consolidation towards the lower limit of an impending “symmetrical triangle” range configuration in place since 06 Feb 2018 low (see 4 hour chart). Click here for a recap on our previous weekly technical outlook.

Therefore, we prefer to turn neutral now between 2733 and 2800 from an initial medium-term bullish bias. A break below 2733 is likely to trigger a deeper slide towards the supports of 2660 follow by 2600 ( lower limit of the aforementioned  “symmetrical triangle” range configuration + 76.4% Fibonacci retracement of the up move from 06 Feb 2018 low to 12 Mar 2018 high).

Only a clearance above 2800 shall reinstate the bullish tone to kick start another potential upleg to retest its current all-time high area at 2870/77.  

Nikkei 225 – 22510 remains the potential upside trigger

Key Levels (1 to 3 weeks)

Intermediate support: 21500/350

Pivot (key support): 20800/600

Resistances: 22510 (upside trigger), 23500 & 23850/24200 

Next support: 19300

Medium-term (1 to 3 weeks) Outlook

Last week, the Japan 225 Index (proxy for the Nikkei 225 futures) had staged a 3% pull-back/consolidation towards the predefined 21500/350 intermediate from its 13 Mar 2018 high of 22109.

No major changes in key technical elements as the Index appears to be undergoing a consolidation phase within an impending bullish “Double Bottom” configuration in place since 10 Feb 2018 low (see 4 hour chart).  We maintain the bullish bias above the 20800/600 pivotal support and a break above 22510 (neckline resistance of the “Double Bottom”) is likely to reinforce the start of another potential bullish impulsive upleg towards the next resistances of 23500 follow by 23850/24200 in the first step.

However, a failure to hold above 20800/600 should damage the primary uptrend in place since Jun 2016 low to kick start of multi-month corrective phase to target the next support at 19300 in the first instance.

Hang Seng – Eyeing a potential bullish breakout

Key Levels (1 to 3 weeks)

Intermediate support: 31060

Pivot (key support): 30070

Resistances: 31800 & 33430/530

Next support: 29070

Medium-term (1 to 3 weeks) Outlook

The Hong Kong 50 Index (proxy for Hang Seng Index futures) had continued to inch higher towards the 31800 neckline resistance of the impending bullish “Double Bottom” configuration in place since 09 Feb 2018 U.S. session low.

No change in key technical elements. We maintain the bullish bias above the 30070 key medium-term pivotal support and a break above 31800 is likely to reinforce another potential upleg to retest the current all-time high zone of 33430/530

However, a break below 30070 support should negate the bullish tone for a slide to retest the 09 Feb 2018 major swing low area of 29070.

ASX 200 – 6030 is the potential upside trigger

Key Levels (1 to 3 weeks)

Intermediate support: 5940

Pivot (key support): 5880

Resistances: 6030 (upside trigger), 6150 & 6300/350

Next support: 5670

Medium-term (1 to 3 weeks) Outlook

Last week, the Australia 200 Index (proxy for the ASX 200 futures) had traded sideways above the 5880 key medium-term pivotal support. It is likely that it is still undergoing a consolidation phase below the descending trendline resistance from 10 Jan 2018 high (depicted in pink).

No changes in its key technical elements except we adjust the upside trigger level to 6030 from 6084 to take into account of the aforementioned descending trendline (downward sloping resistance).

Therefore as long as the 5880 key medium-term pivotal support holds and a break above 6030 is required to kick start a new potential bullish impulsive upleg to retest the Jan 2018 swing high of 6150 before targeting the next significant medium-term resistance at  6300/350.

However, failure to hold above 5880 should negate the bullish tone for a further slide to retest the 5670 major support.

DAX – Continues to consolidate within a bullish configuration

Key Levels (1 to 3 weeks)

Intermediate support: 12115

Pivot (key support): 11900/800

Resistances: 12750 (upside trigger), 13140, 13300 & 13560

Next support: 10800

Medium-term (1 to 3 weeks) Outlook

Last week, the Germany 30 Index (proxy for the DAX futures) had continued to consolidate within the impending bullish “Double Bottom” configuration since 06 Feb 2018 low.

No change, we maintain the bullish bias above the 11900/800 pivotal support with an adjusted upside trigger level at 12750 (close to the neckline resistance of the impending bullish “Double Bottom” configuration – refer to 4 hour chart) to reinforce the start of a potential bullish impulsive upleg to target the next resistance at 13140/13300 in the first step (former minor swing low areas of 11/18 Jan 2018 & a Fibonacci cluster).

On the other hand, failure to hold above 11900/800 should invalidate the recovery scenario to open up scope a multi-month corrective down move to test the next support at 10800 in the first step.

Charts are from City Index Advantage TraderPro