As of trading last week, we are still on sideways movement trading between the range of 4180 and 4340. There are more negative technical instances than positive ones, so it would still be best to keep liquid if you do not plan on trading the range.
First negative thing that can be seen on the chart is a possible triple top formation. Support line for this triple top is the 4180 level. If the index goes below that support line, possible downward target level would be around 4000.
Second negative thing that can be seen on the chart is the MACD on the daily chart which is about to cross below the center line. While on the weekly chart, we can also see the MACD about to cross below the signal line.
Third negative thing that can be seen on the stock, particularly visible on the weekly chart is the possibility of the 5th wave in the Elliot wave count as well as the inability of the index to create higher high.
For the positive, first, we are still above the support line of 4180 and the 65 day moving average is about to converge with that support level. This could provide strong support for the index cancelling out the triple top formation that is looming.
Second, the stochastics on the daily chart would most likely start to move upwards again, this could materialize if the first positive mentioned above happens.
While it is most likely that for next week we could expect a rally towards the resistance line, this is just a positive action on the index for the short term. The first and second positive items I have mentioned above will just cancel out the first negative item, but this still leaves us with a negative signal for the MACD on both daily and weekly charts and the 5th Elliot wave. The odds are stacked in favor of the bears, so exercise caution on your range trades.
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