Technical analysis

Technical Analysis – US 30 index turns more neutral in medium-term as it enters Ichimoku cloud

Technical Analysis – US 30 index turns more neutral in medium-term as it enters Ichimoku cloud

The US 30 index finished Tuesday’s trading 1.3% lower after previously reaching a near four-week high of 25,819,90.

Despite yesterday’s notable decline, the Tenkan- and Kijun-sen lines remain positively aligned, continuing to project a bullish picture in the short-term. However, both have flatlined, this being a sign that positive momentum could be losing steam.

Should the index advance, the area around yesterday’s high of 25,819.90 could act as a barrier to the upside, while the range around the Ichimoku cloud not far below at 25,626.58 might also provide resistance. Stronger bullish movement would shift the focus to the 26,000 handle, this being a level that may hold psychological significance.

On the downside, immediate support could come around the current level of the 50-day moving average at 25,323.14. Further below, the area around the Tenkan-sen at 25,205.90 might offer support as well.

The medium-term picture is looking bullish to neutral at the moment. The index has fallen inside the Ichimoku cloud, tilting the outlook towards neutrality, though it continues to trade above both the 50- and 100-day MAs, with both MA lines maintaining a positive slope. A fall below the 50-day MA – price action is currently taking place not far above this level – would turn the outlook more neutral.

Overall, the short-term bias is bullish though the positive tone seems to be easing, and the medium-term outlook is looking bullish to neutral.

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