Sunday Market Analysis #17

A correction seems to be happening from the EU market. Is there any reasons to panic? The NASDAQ seems to be the weakest index from the US market after a Goldman Sachs’s analyst decided that tech stocks were overvalued. Let’s see how the different stock market indexes are currently moving to be prepared for the coming week.

 

Stock Market Indexes

S&P500

S&P500 in daily time frame

  • The S&P500 is still consolidating between 2420 – 2440. The long term bullish sentiment is still intact.
  • It crossed under its 20 SMA but is still above its 50 and 200 SMAs.
  • The RSI is < 70 and angling up.
  • The last candlestick is bearish with a small body and an upper wick which failed to break above the 20 SMA. Selling pressure.
  • Nearest support zone ~2420.
  • Nearest resistance zone ~2440.

NASDAQ

NASDAQ in daily time frame

  • The NASDAQ is the index which worries the most, but is it justified? After a long bullish run, it’s normal to have a consolidation or a correction.
  • Pay attention to the support zone above 6100 points.
  • It crossed under its 50 SMA but is still above its 200 SMA.
  • The RSI is < 50 and flat.
  • The last candlestick is bearish with a little body showing a lack of interest.
  • Nearest support zone ~6100.
  • Nearest resistance zone ~6320.

RUSSELL 2000

Russell2000 in daily time frame

  • The RUSSELL is still consolidating between ~1360 and ~1420.
  • The SMAs are not reliable since we are in a consolidation zone.
  • The RSI is < 70 and flat.
  • The last candlestick is bearish with a small body and an upper wick showing a lack of interest.
  • Nearest support zone ~1380.
  • Nearest resistance zone ~1425.

CAC40

CAC40 in daily time frame

  • As shown from now several weeks, the CAC40 was the first index showing signs of weaknesses and those signs are confirmed now.
  • It is filling its gap which is not a good signal. Nonetheless, again, a healthy uptrend is not a straight line. A correction is normal and is happening right now.
  • It is still under its 20/50 SMAs and above its 200 SMA.
  • The RSI is < 50 and is angling down.
  • The last candlestick is very bearish with an upper wick and a quite long body showing a clear selling interest.
  • Nearest support zone ~5080.
  • Nearest resistance zone ~5240.

NIKKEI

Nikkei in daily time frame

  • The NIKKEI seems to be in an uptrend as shown by the channel defined by the grey lines.
  • It is still above its major support zone.
  • It crossed under its 20 SMA but is still above the 50 and 200 SMAs.
  • The RSI is < 70 and is angling down.
  • The last candlestick is bullish with a tiny body and a lower wick showing a buying interest. Nonetheless, it failed to break above the 20 SMA.
  • Nearest support zone ~19600.
  • Nearest resistance zone ~20200.

SUM UP

I don’t think there is any reason to panic. A trend is not a straight line and a correction would be a healthy sign that we are not in a bubble. We are still bullish in long term but bearish in short term. If you have long positions, you could buy an inverse equity ETF to cover your positions. It’s a simple strategy which I use a lot to sleep well and keep my positions open. If you want to know how to trade by reducing your risks as much as possible, click here to download your survival kit! Happy trading!