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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

US indices technical forecast: key support breaks hint at losses

Nasdaq 100, Dow Jones, S&P 500 appear at risk going forward; Nasdaq confirms a trendline breakout as Dow clears a triangle and S&P 500 on the verge of confirming a bearish wedge breakout.

Source: Bloomberg

Nasdaq 100 outlook - bearish

The Nasdaq 100 is appearing increasingly bearish heading into the new trading week. On the daily chart, the index confirmed a breakout under a near-term rising trendline from the beginning of this year. This has set the stage for a reversal of the uptrend from about 10,708 – 12,987. Immediate support is the 38.2% Fibonacci retracement level at 12,008.

Breaking lower exposes the 50-day Simple Moving Average (SMA). The latter could hold as support, maintaining an upside focus. Otherwise, extending beyond that places the focus on the 61.8% Fibonacci retracement level at 11,426 towards the 10,484 – 10,708 support zone. On the flip side, key resistance seems to be the 23.6% level at 12368 towards the 12,846 – 12,987 range.

Nasdaq 100 daily chart

Source: TradingView

Dow Jones outlook - bearish

The Dow Jones may also be setting the stage for disappointment in the week ahead. That is because prices confirmed a breakout under a Symmetrical Triangle that has been brewing since October. But, last week, prices were unable to clear the 38.2% Fibonacci retracement level at 32,709, which held as critical support and should be watched very closely.

What did break was the 100-day SMA. While confirmation is lacking, a further downside close would open the door to an increasingly bearish technical bias. Beyond that is the 31,738 – 32,017 support zone towards the 61.8% level at 31,153. In the event of a turn higher, keep a close eye on the former floor of the triangle, which could hold as new resistance.

Dow Jones daily chart

Source: TradingView

S&P 500 outlook - bearish

The S&P 500 may also be readying to extend losses in the week ahead. Last week, prices closed under the floor of a brewing bearish Rising Wedge chart formation since October. Granted, confirmation of the breakout was lacking. Immediate support appears to be the 100-day SMA. Pushing lower towards this point could offer an increasingly bearish view.

Extending lower exposes the 38.2% Fibonacci retracement level at 3817 towards the 23.6% point at 3696. Following the trajectory of the Rising Wedge could eventually see prices reach the 3571 – 3502 support zone. Otherwise, a climb back into the wedge would likely shift the focus to a more bullish setting, placing the focus on the 78.6% level at 4150.

S&P 500 daily chart

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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