AMEX Composite (AMEX.NDX)

Short term

AMEX Composite is within an approximate horizontal trend channel in the short term, which indicates further development in the same direction. The price has had a strong fall after the negative signal from the head and shoulders formation at the break down through the support at 5118. The objective at 4894 is now met, but the formation signals further development in the same direction. There is no support in the price chart and further decline is indicated. In case of a positive reaction, the index has resistance at 4900 points. RSI below 30 shows that the momentum of the index is strongly negative in the short term. Investor have steadily reduced the price to sell the index, which indicates increasing pessimism and continued falling prices. However, particularly in big stocks, low RSI may be a sign that the stock is oversold and that there is a chance for a reaction upwards. The index is overall assessed as technically negative for the short term.

Recommendation one to six weeks: Negative

Medium term

AMEX Composite has broken the floor of the rising trend channel in the medium long term, which indicates a weaker initial rising rate. The price has had a strong fall after the negative signal from the double top formation at the break down through the support at 5081. The objective at 4788 is now met, but the formation signals further development in the same direction. The index has support at points 4600 and resistance at points 5070. RSI below 30 shows that the momentum of the index is strongly negative in the short term. Investor have steadily reduced the price to sell the index, which indicates increasing pessimism and continued falling prices. However, particularly in big stocks, low RSI may be a sign that the stock is oversold and that there is a chance for a reaction upwards. The index is overall assessed as technically slightly negative for the medium long term.

Recommendation one to six months: Weak Negative

Long term

AMEX Composite has broken through the floor of a rising trend channel in the long term. This indicates a slower rising rate at first, or the start of a more horizontal development. The index is moving within a rectangle formation between support at 4382 and resistance at 5484. A decisive break through one of these levels indicates the new direction for the index. The index is testing support at points 4700. This could give a positive reaction, but a downward breakthrough of points 4700 means a negative signal. The RSI curve shows a falling trend, which could be an early signal of the start of a falling trend for the price as well. The index is overall assessed as technically positive for the long term.

Recommendation one to six quarters: Positive