Technical Analysis: Benchmark Indexes at ‘Key Bullish’ Levels

(Bloomberg) -- Benchmark indexes for U.S., Japanese and European stocks are close to breaking “long-term bullish” levels, according to analysts at Credit Suisse Group AG who use price charts to make forecasts. “The Standard & Poor’s 500 Index held its ground just below the 377-day moving average,” technical analysts at the Swiss bank including Zurich-based Rolf Bertschi wrote in a report today. The benchmark index for U.S. stocks rose to 1,028 at yesterday’s close, the highest since Oct. 6. That’s about 29 points below the 377-day moving average, a Fibonacci number which is currently at 1,057.04 according to Bloomberg data. A break would be “long-term bullish,” Bertschi wrote.

Fibonacci analysts use a system pioneered by 13th century mathematician Leonardo Pisano, who discerned ratios from proportions found in nature. He is best known for the discovery of the Fibonacci numbers commonly referred to as the Fibonacci sequence. After two starting values, each number is the sum of the two numbers before it. The next Fibonacci moving average for Standard & Poor’s 500 Index is at 1,215.46, Bloomberg data show.“The Nikkei 225 Stock Average and the Dow Jones Euro Stoxx 50 Index are trading at their 377-day averages,” Bertschi wrote. Such levels are set at 10,694 and 2,820.71 respectively, according to Bloomberg data. “A break of these levels would have the same bullish implications as for the S&P 500 index,” the analysts added. All three indexes “are at key levels.”

The index of 225 companies traded on the Tokyo Stock Exchange closed at 10,639.71 today. The benchmark index for euro-region equities traded at 2,795.86 as of 10:22 a.m. in London.Moving averages show the average value of a security’s price over a set period and are commonly used to define areas of possible support, or floor, and resistance, or ceiling, in technical analysis.