Weekly Technical Outlook on Major Stock Indices 29 Apr to 03 May 2019

S&P 500 – Potential residual push up in progress

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Key Levels (1 to 3 weeks)

Intermediate support: 2926

Pivot (key support): 2908

Resistances: 2972 & 2990

Next supports: 2875 & 2856

Medium-term (1 to 3 weeks) Outlook

Last week, the SP 500 Index (proxy for the S&P 500 futures) has continued to push higher as expected and almost met the current all-time high level of 2940 printed on 21 Sep 2018. Click here for a recap on our previous weekly outlook report.

Technical elements are still advocating for further potential upside as follow;

• Despite its daily RSI oscillator has reached an overbought level of 74 which is a similar level seen on 29 Aug 2018 before the major swing high of 2940 (the current all-time high), there are no clear signs of a bearish divergence signal yet which suggests that medium-term upside momentum of price action remains intact.
• Relative strength analysis among the highlighted the 5 U.S. “high beta/risk on” sectors/indices are still advocating further outperformance in the Nasdaq 100, Semiconductor sector and NYSE FANG+ Index against the S&P 500. In addition, the underperformance seen in the Financial sector since Mar 2018 has started to ease.
• Price action of the Index has continued to evolve with a medium-term ascending channel since 08 Mar 2019 low of 2722 with the upper boundary now acting as resistance at 2990.
• Elliot Wave/fractal analysis is advocating a potential residual up move to complete the wave 9 of an extended impulsive bullish wave 1/ of an intermediate degree in place since 26 Dec 2018 low before a potential multi-week corrective decline materialises. Potential end target of the wave 1/ stands at the 2972/90 zone as defined by Fibonacci expansion cluster levels.

Therefore, we maintain the bullish bias in any dips with a tightened key medium-term pivotal support at 2908 (also the lower boundary of the medium-term ascending channel support from 08 Mar 2018 low) for a further potential push up to target 2972 and above it opens up scope for a further rally towards 2990 next.

On the other hand, a daily close below 2908 invalidates the bullish scenario to kickstart a multi-week corrective decline towards the next support at 2875/56 in the first step.

Nikkei 225 – Uptrend remains intact

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Key Levels (1 to 3 weeks)

Intermediate support: 22350

Pivot (key support): 22000/21880

Resistances: 22800 & 23050 (LT pivot)

Next support: 20900

Medium-term (1 to 3 weeks) Outlook

The Japan cash stock market will be closed for an extended Golden Week holidays from 29 Apr to 06 May 2019 while the Nikkei 225 futures remains open for trading over in CME Globex.

The Japan 225 Index (proxy for the Nikkei 225 futures) has continued to inch higher as expected and broke above its 22350 minor range resistance in place since 17 Apr 2019 in today, 29 Apr Asian session. No change, maintain bullish bias above the adjusted key medium-term pivotal support at 22000/21880 for a further potential push up to target 22880 before the long-term pivotal resistance at 23050 (close to 76.4% Fibonacci retracement of the previous 3-mont down move from 01 Oct 2018 high to 26 Dec 2018 low & pull-back resistance of the former major ascending channel support from Jun 2016 low).

On the other hand, a daily close below 21880 negates the bullish tone for a slide back to retest 20900 support (08/25 Mar 2019 swing low areas).

Hang Seng – 29500 remains the key support to watch

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Key Levels (1 to 3 weeks)

Intermediate support: 29830

Pivot (key support): 29500

Resistances: 30500/650 & 31300/550

Next support: 27290

Medium-term (1 to 3 weeks) Outlook

Last week, the Hong Kong 50 Index (proxy for Hang Seng Index futures) has inched lower and tested the 29500 key medium-term pivotal support before it staged a minor bounce on last Fri, 26 Apr. In today, 29 Apr Asia session, it staged an opening gapped up and broke above a minor descending resistance from 15 Apr 2019 high now turns pull-back support at 29830.

Maintain bullish bias with 29500 remains as the key medium-term pivotal support for a further potential push up target the next resistances at 30500/650 and 31300/550.

On the other hand, a daily close below 29500 negates the bullish tone for a deeper pull-back towards the next support at 27290 (former swing high of 03 Dec 2018 & close to 50% Fibonacci retracement of the on-going up move from 03 Jan 2019 low to 09 Apr 2019 high).

ASX 200 – Further potential upside through bullish break above 6290

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Key Levels (1 to 3 weeks)

Intermediate support: 6320

Pivot (key support): 6290

Resistances: 6400 & 6495

Next support: 6095

Medium-term (1 to 3 weeks) Outlook

The Australia 200 Index (proxy for the ASX 200 futures) has staged a bullish breakout above the 6290 upper limit of the neutrality zone as per highlighted in our previous report. Last week, it traded higher to test its 52-week high at 6380, also the major swing high area of 6380 seen on 17 Aug 2018 before it staged a pull-back of 0.8% to print a current intraday low of 6344 in today, 29 Apr Asian session.

Flip to a bullish bias above 6290 key medium-term pivotal support for a further potential push uo to retest 6380/400 before targeting the next resistance at 6495.

On the other hand, a daily close below 6290 invalidates the bullish scenario to kickstart a corrective decline towards the next support at 6095 in the first step.

DAX – Mix elements, bulls now need to break above 12520

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Key Levels (1 to 3 weeks)

Resistances: 12525 & 12800

Supports: 12100 & 11800

Medium-term (1 to 3 weeks) Outlook

The Germany 30 Index (proxy for the DAX futures) has shaped the expected bullish breakout above 12100 (the major descending resistance from its current all-time high printed on 23 Jan 2018) as per highlighted in our previous report. It has now approaching the 12450 medium-term resistance/target which is also just below the upper boundary of the medium-term ascending channel from 26 Dec 2018 low now acting as a resistance at 12525 and the swing high areas of 21/28 Sep 2018.

Mix elements now, prefer to turn neutral between 12525 and 12100. A clearance above 12525 opens up scope for a further potential rally to target the next resistance at 12800.

On the flipside, a daily close below 12100 sees a deeper pull-back to retest 11800.

Charts are from City Index Advantage TraderPro & eSignal