Technical Analysis – US 30 index’s gains curbed by Ichimoku cloud and 100-MA
2022.05.19 12:21
The US 30 stock index (Cash) has been driven back down to the vicinity of its recently recorded 14-month low of 31,224 by the restricting Ichimoku cloud and the descending 100-period simple moving average (SMA). That said the falling SMAs are endorsing the approximately one-month downward bearing from the 35,496 high, which pierced marginally below the 31,321 low reached back in March 2021, where the price had found its latest footing prior to current selling pressures.
The Ichimoku lines are indicating that negative forces are close to regaining full command, while the short-term oscillators are hinting of the pause in the selloff in the index. The now downward pointing RSI has snagged around the 30 oversold level, while the negative charge of the stochastic oscillator is being tested. Meanwhile, the MACD is promoting additional declines in the price as it is diving deeper in the indicator’s bearish territory.
If the price closes definitively beneath the immediate support barriers of 31,321 and 31,224, this will validate that the index is likely to surrender extra ground, verifying the recent weakness from yesterday. The next support region to challenge sellers’ dominance could exist around the 30,518-30,760 area formed by lows early on in February and March 2021. Remaining heavy, the bears may then aim for the 30,009 barrier.
Otherwise, if buyers re-emerge and drive the price north of the 14-month low’s vicinity, initial resistance could stem from the 31,857 inside swing low coinciding with the Ichimoku cloud’s lower surface, and the Ichimoku lines overhead at 31,960. If buying interest endures, the falling 50-period SMA at 32,130 and the 32,305 obstacle could impede buyers from challenging the fortified 32,680-32,816 resistance band.
Summarizing, the US 30 index’s bearish bias looks to be rekindling. A close in the current 4-hour red candle beneath the 31,321 and the 31,224 support borders may suggest further dampening in the index’s outlook. That said, for optimism to return in the index, a pickup in sentiment would need to drive the price over the 32,680-32,816 resistance and beyond the 33,050 barrier.
190522_US30Cash 4Hour
