The Dutch AEX cash index entered a flying mode on February 3rd, while on the 10th of the month, it managed to clear the 616.69 hurdle, which provided strong resistance between January 9th and 24th, thereby confirming a forthcoming higher high. That said, the rally was stopped near the 631.00 barrier and then, the index retreated somewhat. Overall, the index is trading above an upside support line drawn from the low of December 27th, 2018, and thus, we will consider the long-term outlook to be positive for now.
If the bulls are strong enough to recharge soon and break above the 631 territory, we could see them driving the battle towards the high of January 2001, at around 647.00. If they are not willing to give up near that zone, another push north may carry larger bullish implications, perhaps paving the way towards the peak of December 2000, near the 67.70 zone.
Taking a look at our short-term oscillators, we see that the RSI, although above 50, hit resistance slightly below its 70 line and turned down, while the MACD lies above both its zero and trigger lines, but shows signs of slowing down. Both indicators suggest decelerating upside speed and thus, we would stay careful over a small retreat before the next positive leg, perhaps for the AEX to test the 616.69 zone as a support this time.
In order to start examining the case of a bearish reversal, we would like to see a decisive dip below the 585.70 barrier, defined as a support by the low of January 31st. Such a move would not only push the price below the aforementioned upside line, but it would also confirm a forthcoming lower low on the daily chart. The bears could then get encouraged to dive towards 570.64 zone, marked by the low of October 18th, the break of which may extend the slide towards the low of October 3rd, at around 553.71.
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