Following November and December’s perky push, amounting to roughly +13.3%, 2024 is off to a strong lead, up +1.5% month to date and revitalizing the all-time high (ATH) at 4,842.
Technical research studies from the month-to-month timeframe stay clear and, for the a lot of part, the same. The index has actually been entrenched in a dominant uptrend given that breaking out in early 2013. Aside from 2 significant corrections in 2020 and 2022, the uptrend has actually been one-sided.
Weekly resistance cleared; channel resistance in view
Cost action from the weekly timeframe dismissed deals around resistance at 4,743 in current weeks (now showing prospective assistance), a relocation not just leading the way to clear the ATH however likewise uncovering weekly channel resistance extended from the high of 4,607.
In spite of the advantage existence, for those who follow/employ the Relative Strength Index (RSI) in their trading, the indication is quick approaching overbought area on the weekly chart and echoing the possibility of unfavorable divergence. While this is a signal that momentum has actually slowed, it does not imply a turnaround is ensured. We observed a small debt consolidation from mid-December and this might be all we receive from the RSI unfavorable divergence.
ATH swallowed up
On the day-to-day timeframe, technical eyes will have seen assistance at 4,725 bump heads with rate on Wednesday last week and form a dragonfly doji candlestick pattern (bullish signal). As you can see, following the healing from the assistance level and Friday’s action swallowing up the ATH, attention will now likely move to the possibility of 4,818 providing assistance.
The break of the ATH will draw in a mix of profit-taking and breakout-buying. The day-to-day close above 4,818, naturally, is most likely to draw in more breakout purchasing interest as traders go into the marketplace to sign up with the next leg greater. There is constantly that possibility of a bull trap forming; for that reason, care is called for.
Playbook today?
Following the breakout greater, conservative purchasers and sellers will likely rest on their hands to let the dust settle previously dedicating. A retest of 4,818 that holds as assistance might be adequate to attract additional bullish interest, while a close back under the kept in mind level shows a bull trap, and a correction back to weekly assistance at 4,743 might be on the table.
Source: TradingView
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