Looking at the S&P 500 Futures Daily Chart I arrive at following conclusion:
- It looks oversold in the short term. Last week we saw it showing eight handle (8xx) which confirmed my view that US Markets are in Primary Bear Trend.
- RSI (14) is showing divergence and possibly S&P 500 might find some support at current level (at the time of writing this its at 920).
- It is too far away from even 13 Period EMA which is again a signal of oversold condition. Although on Monday, it went up to touch 13 EMA and came down from there. The 34 EMA is near 1120 and the 55 EMA at 1160 !
Looking at the Daily Chart of Nifty Futures, it made a hammer today, which means today's low can be a good support for short term. Following is my view based on the chart:
- It is too far below the Main Downtrend Line - Line1 which is near 4200, means it is in oversold zone for the short term.
- The EMAs are also far above and it almost reached 13 Period EMA on 14th Oct and fell from there. The 34 EMA is near 3975 and 55 EMA is near 4090, which confirms short term oversold condition.
- The tentative Previous Support Line - Line2 should act as resistance if it goes up, the level for that is around 3800.