US indices technical forecast: key support breaks hint at losses

Nasdaq 100 outlook - bearish

The Nasdaq 100 is appearing increasingly bearish heading into the new trading week. On the daily chart, the index confirmed a breakout under a near-term rising trendline from the beginning of this year. This has set the stage for a reversal of the uptrend from about 10,708 – 12,987. Immediate support is the 38.2% Fibonacci retracement level at 12,008.

Breaking lower exposes the 50-day Simple Moving Average (SMA). The latter could hold as support, maintaining an upside focus. Otherwise, extending beyond that places the focus on the 61.8% Fibonacci retracement level at 11,426 towards the 10,484 – 10,708 support zone. On the flip side, key resistance seems to be the 23.6% level at 12368 towards the 12,846 – 12,987 range.

Nasdaq 100 daily chart

Dow Jones outlook - bearish

The Dow Jones may also be setting the stage for disappointment in the week ahead. That is because prices confirmed a breakout under a Symmetrical Triangle that has been brewing since October. But, last week, prices were unable to clear the 38.2% Fibonacci retracement level at 32,709, which held as critical support and should be watched very closely.

What did break was the 100-day SMA. While confirmation is lacking, a further downside close would open the door to an increasingly bearish technical bias. Beyond that is the 31,738 – 32,017 support zone towards the 61.8% level at 31,153. In the event of a turn higher, keep a close eye on the former floor of the triangle, which could hold as new resistance.

Dow Jones daily chart

S&P 500 outlook - bearish

The S&P 500 may also be readying to extend losses in the week ahead. Last week, prices closed under the floor of a brewing bearish Rising Wedge chart formation since October. Granted, confirmation of the breakout was lacking. Immediate support appears to be the 100-day SMA. Pushing lower towards this point could offer an increasingly bearish view.

Extending lower exposes the 38.2% Fibonacci retracement level at 3817 towards the 23.6% point at 3696. Following the trajectory of the Rising Wedge could eventually see prices reach the 3571 – 3502 support zone. Otherwise, a climb back into the wedge would likely shift the focus to a more bullish setting, placing the focus on the 78.6% level at 4150.

S&P 500 daily chart

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