Technical Analysis Nd100 : 2018-06-29

Weaker US data bearish for Nd100

Expansion in US business activities slowed in June. Will the Nd100 continue declining?

Recent US economic data were negative on balance after the Federal Reserve’s June meeting. While retail sales rose more than expected in May, industrial production expansion compared with the same period a year ago slowed. And while housing starts rose in May the decline in building permits accelerated and existing home sales declined. The expansion in services and manufacturing sectors slowed in June. Durable goods orders in May declined 0.6% still following a downwardly revised 1% decline in April. However the trade deficit in goods narrowed in May after widening in April. Weaker economic data are bearish for Nd100. 

On the daily timeframe the Nd100: D1 is testing the 50-day moving average MA(50) which is leveling off.

• The Parabolic indicator gives a sell signal.
• The Donchian channel indicates downtrend: it is tilted lower.
• The MACD indicator gives a bearish signal: it is above the signal line and the gap is narrowing.
• The Stochastic oscillator is rising from the oversold zone.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 6934.63. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian channel at 7329.17. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (7329.17) without reaching the order (6934.63), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary