Summary:
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US indices little changed on the day
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Inverse S-H-S on US100?
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Netflix close to printing “death cross”
It’s been a fairly quiet start to the week so far for stock markets with US indices little changed from Friday’s closing levels ahead of the North American session. After a sizable sell-off last Monday, the US100 was range-bound for much of the week with the lows around 6712 providing support while 6935 offered resistance. The recent price action has seen a possible inverse head and shoulders pattern form with the aforementioned resistance at 6935 a potential neckline. A clean break above there (6935) would trigger the setup which would target a move to 7158 if it plays out in a textbook fashion.
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A possible reversal pattern is forming in the US100, with an inverse head and shoulders being carved out. A break above 6935 would trigger the setup and target a larger move to 7158. Source: xStation
Looking at individual stocks, Netflix has an interesting technical pattern developing which could see the market print a death cross for the first time in over 2 years. A death cross requires the 50 day SMA to move below the 200 day SMA and can be seen as a negative signal that indicates the trend has turned lower. Having said that, it is worth pointing out that the last time we got a death cross, back in early 2016 the market didn’t actually fall that much lower. For much of the year the market was ranging before a break higher which was accompanied by a bullish cross, sparked the large rally that followed.
A death cross looks set to print in Netflix, with the 50 day SMA close to dropping below the 200 day SMA for the first time in more than 2 years. Source: xStation
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