technical analysis USTEC

Technical analysis of USTEC

USTEC, the representative spot CFD based on the Nasdaq 100, has made gains since Monday afternoon GMT. Click on the image to magnify. Price is now testing the key psychological area of 10,000 again. Fundamentals this week have been fairly negative: a new wave of covid-19 infections has gained pace in northern China and the USA, and hopes for a V-shaped economic recovery remain low. Today’s technical analysis of USTEC looks at important areas based on moving averages, other technical indicators and more.

The most important high resistance on this chart is the latest high slightly above 10,150. Low support could be the recent low on Monday around 9,400. Either of these areas could be a barrier to further movement in the current ‘see-saw’ motion of many stock markets.

Technical indicators on USTEC H4

 

Moving averages continue to print a strong buy signal. The 50, 100 and 200 SMAs are all successively above each other. The key support from moving averages is the 200 SMA, but the faster 100 might also lead to a bounce if tested in the near future.

Bollinger Bands have expanded somewhat over the last fortnight. This usually suggests that volatility is increasing. While there’s currently no sign of saturation from Bands, the slow stochastic has recently completed a downward crossover in overbought, traditionally a strong sell signal on this relatively high timeframe. We can observe from volumes that buying was very high during losses at the end of last week, so ‘buy the dips’ still seems to be active.

Price action and Fibonacci

 

Recent price action suggests an element of indecision around the key resistance of 10,000. The focus of this impression is the extended doji on Tuesday afternoon GMT and the relatively long tail of the penultimate completed period. Price action around the 50 SMA from Bands will probably be important tomorrow and next week, with short-term sellers likely to attempt to exploit any strong push below.

The key area from the daily Fibonacci fan remains the 61.8%, the lowest yellow line on this chart. The confluence of this zone with the 200 SMA and the lower deviation of Bands seems to confirm this area’s importance as a support. To the upside, any new highs in the near future would probably be capped by the 50% area from the Fibonacci fan.

Technical analysis of USTEC: summary

 

Overall the picture from TA for USTEC is positive on the four-hour timeframe. After the slow stochastic emerges from overbought, ongoing gains could be expected based on the chart and indicators.

Traders must not ignore fundamentals, though. The last week has seen considerable instability in many stock markets and particularly considerable nervousness after the spike in cases of covid-19 in Beijing. It might be prudent to consider waiting until TA and fundamentals are more aligned before trading beyond the short term.

Thank you for reading Exness Education’s technical analysis of USTEC! Join us again tomorrow for the requested article on the pound in the aftermath of the BoE‘s meeting. You can also request a symbol to be covered here by commenting on social media.

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