US 500 index ticks up above 4,000 and the medium-term uptrend lines

The US 500 cash index has surged more than 3.5% over the last three days, overcoming the 4,100 level. However, the technical oscillators appear overboughtThe RSI is pointing down in the positive territory, while the stochastic is turning lower above the 80 level, suggesting that the bullish move in the market may come to an end soon. Also, the index is still standing above the simple moving averages (SMAs) and the medium-term uptrend lines.

Should the index manage to strengthen its positive momentum, the next resistance could come around 4,200, which is a six-month peak. A break above it would shift the bias to a more bullish one and open the way towards the 4,325 barrier.

However, if prices are unable to remain above 4,080, the risk would shift back to the downside, with the 50- the 100, and the 200-day SMAs at 4,027, 3,980 and 3,940 respectively, once again coming into focus, as well as the ascending trend lines around 3,900.

To conclude, the outlook remains positive since prices hold above all the moving average lines and the recent upside rally stays in place.

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).