The US 100 index has risen in the past two weeks, recovering more than half of the losses it posted in early February when it fell 12.5% over the period January 29 – February 9. During that period, the index collapsed from an all-time high of 7037, before it found support near the crossroads of the 6162 level, the uptrend line drawn from the low of June 2016, and the 200-day exponential moving average. Subsequently, it rebounded and is currently trading not far from its record highs, last seen at 6803.
Momentum oscillators paint a cautiously positive picture for the index. The RSI rebounded from its neutral 50-line and is pointing upwards, detecting modest upside momentum. The MACD, already above both its zero and trigger lines, looks to be moving higher as well.
Should the index continue along its recovery path, immediate resistance may be encountered near the latest highs of February 21, at 6890. If the bulls manage to break that territory, the next level that could come into play is the aforementioned all-time high of 7037. Further advances after that would take the index into uncharted territory. In such a case, sell orders may be found near round figures, as they may hold some psychological significance. For instance, the 7200 or 7300 territories could provide some resistance. Continued upside could even aim for the 7570 barrier, which is the 161.8% Fibonacci retracement of the January 29 – February 9 collapse, with a high at 7037 and low at 6162.
On the other hand, in case the upside momentum fades and the index tumbles again, immediate support may be found at 6690, the February 22 low. A downside break of that zone could set the stage for declines towards the 6286 hurdle, which is the 23.6% Fibonacci retracement of the February 2016 – January 2018 advance, with a low at 3866 and high at 7032. If sellers manage to break below that level too, then buy orders may be lurking near the index’s recent lows at 6162, marked by the lows of February 9. A potential violation of that territory too, would mark a forthcoming lower low on the daily chart, and could be a signal for even more declines, initially towards the psychological area of 6000.
