S&P 500 and Nasdaq Composite Index Technical Outlook: Looking for a Bullish Break?

S&P 500, SPX, NASDAQ 100, NDX – TECHNICAL OUTLOOK:

• The S&P 500 index is approaching essential 200-day shifting common resistance.
• Nasdaq, a laggard in contrast with the S&P 500, can be starting to flex muscular tissues.
• What lies forward and what are the important thing ranges to look at?

S&P 500 INDEX SHORT-TERM TECHNICAL OUTLOOK – SLIGHTLY BULLISH

In a holiday-shortened week, the S&P 500 is at a vital crossroads, a break above which may improve the possibilities that the medium-term weak spot in US equities is starting to reverse.

The index is testing a ceiling on the 200-day shifting common (now at about 4060). Two main makes an attempt this 12 months to cross above the long-term barrier have been unsuccessful. Hence, a clearance above it might solidify the case that this time is completely different. That is, the rebound might not simply be a correction, however may unfold into a bigger rally.

S&P 500 Daily Chart

Chart Created Using TradingView

The probabilities of an eventual break above the shifting common are rising, even when it doesn’t occur in its first try. The index held fairly a powerful cushion on the early-November excessive of 3912 earlier within the week – a break under that might have been a critical blow to the nascent rally. Furthermore, momentum continues to favor additional upside. Importantly, optimistic divergence (falling index related to rising momentum) on the month-to-month charts coupled with an increase this month above October’s excessive is an indication that the tide may very well be altering.

S&P 500 Hourly Chart

Chart Created Using TradingView

How lasting this rebound seems to be stays a query. In this regard, the August excessive of 4325 is a key barrier to look at. The index must cross above this hurdle to solidify the possibilities that the worst is over for US equities.

On the draw back, 3912 stays rapid and important help. Any break under would affirm that the short-term uptrend has light. Moreover, a fall underneath the ground on the November 3 low of 3698 would elevate the percentages that medium-term weak spot is resuming.

NASDAQ COMPOSITE INDEX SHORT-TERM TECHNICAL OUTLOOK – SLIGHTLY BULLISH

After an preliminary setback, the Nasdaq 100 index is but once more trying to rise previous the higher fringe of a rising channel from mid-October. As highlighted within the earlier replace earlier within the week, the bias continues to be bullish. Positive divergence on the weekly charts of the Nasdaq 100 index on the October low confirms that the multi-month slide has misplaced steam.

NASDAQ COMPOSITE Hourly Chart

Chart Created Using TradingView

The odds are excessive that the index may rise towards the 200-day shifting common (now at about 12610), not too removed from the value goal of the minor double backside (the October and the November lows) of 12750. The final time the index was decisively above the long-term shifting common was in January. Hence a cross-over of the typical could be an indication that medium-term downward strain was fading. Still, the August excessive of 13721 would pose a big menace to a long-lasting restoration.

— Written by Manish Jaradi, Strategist for DailyFX.com