Technical Analysis – US 100 index: Another record high

The US 100 stock index surged to an all-time high of 21,380, resuming its broad positive trajectory after a short break.

The bullish trend in the market shows no sign of stress, but challenges could arise soon as the RSI and the stochastic oscillator hover near their previous highs and around overbought levels.

Moreover, the price has yet to successfully exit the neutral symmetrical triangle above 21,310. A sustainable move above this formation could meet the resistance line, which connects the highs from August and November at 21,615, while the 21,810 region could attract some attention as it coincides with the 161.8% Fibonacci extension of the previous pullback. Then, all eyes would turn to the 22,000 psychological mark.

However, if profit taking kicks in, the index could slide toward the 21,000 level and the triangle’s support trendline at 20,880. A move lower could then test the 50-day simple moving average (SMA) near 20,480, a break of which could cause a fast decline into the 20,000-20,130 region.

All in all, although the US 100 index hit a fresh record high, it must sustain itself above the 21,310 level to keep the focus on the upside.