Equities Q2 2021 Technical Forecast

S&P 500 Index Might Prolong Greater as Nikkei 225, Hold Seng Index Consolidate

S&P 500 Index

The S&P 500 index is using an ascending development increased and will try and problem a psychological resistance stage at 4,000 (the 100% Fibonacci extension of the previous 12 months’s first part rally). Breaking this boundary might open the door for additional upside potential with a watch on 4,290 – the 127.2% Fibonacci extension on the identical run. The general development retains a bullish bias because the index kinds consecutive increased highs and lows since rebounding from its March 2020 trough.

Wanting forward, the upward trajectory stays intact for the US inventory market, though some technical pullbacks are attainable into the second quarter of 2021. Europe is going through a 3rd viral wave amid a slowdown in vaccine progress, whereas the financial restoration world wide is prone to be uneven and extended. Reflation hopes and the inflation outlook might proceed to spice up longer-term bond yields, that are prone to exert stress on progress shares.

The S&P 500 registered an astonishing 80% acquire over the previous 12 months, underpinned by ultra-loose financial coverage and restoration prospects. On the weekly chart, the ascending development confirmed no signal of stopping quickly because the 4- and 10-week Easy Transferring Common (SMA) traces are trending increased. Nonetheless, merchants ought to be vigilant about short-term pullbacks if profit-taking kicks in.

S&P 500 Index – Weekly Timeframe (2019 to 2021)

Supply: TradingView

Nikkei 225 Index

The Nikkei 225 did not breach the 127.2% Fibonacci extension stage of the March-June advance (30,200) and has retreated barely on the weekly chart. The MACD indicator is about to type a bearish crossover, suggesting that upward momentum is fading and a deeper pullback is feasible. A technical correction might not derail the index’s upward trajectory within the medium time period, nevertheless, as instructed by the rising 10- and 20-week SMA traces.

Wanting forward, present consolidation might pave the best way for increased highs ought to a sturdy world financial restoration drive up demand for Japanese exports and companies.

Nikkei 225 Chart – Weekly Timeframe (2019 to 2021)

Supply: TradingView

Hold Seng Index

Hong Kong’s Hold Seng Index (HSI) breached a serious “Descending Channel” in early 2021 earlier than costs entered a consolidative interval. Not too long ago, promoting stress seems to be gaining momentum, as instructed by the formation of a bearish MACD crossover.

Wanting forward, a agency break beneath the 23.6% Fibonacci retracement (28,800) would doubtless intensify promoting stress and expose the following key assist stage at 27,350 (the 38.2% Fibonacci retracement). Holding above the ceiling of the “Descending Channel” might pave the best way for a value rebound ought to market sentiment recuperate.

Hold Seng Index – Weekly Timeframe (2019 to 2021)

Supply: TradingView