A clear and decisive dip below 23765, marked by Tuesday’s low, would confirm a forthcoming lower low on both the 4-hour and daily charts and may pave the way towards the 22970 territories, defined as a support by the low of Sept. 25, 2020.
If that barrier cannot halt the slide, then its break may result in extensions towards the low of May 25, 2020, at 22500.
Shifting attention to our short-term oscillators, we see that the RSI turned down after hitting resistance slightly below its 50 line, while the MACD, although above its trigger line, has topped within its negative territory. Both indicators suggest that the index is gaining back some downside speed, which is in line with the scenario of seeing further near-term declines.
To abandon the bearish case and start examining whether the bulls have stolen the bears’ swords, we would like to see a recovery above 26215. This may confirm the break above the aforementioned tentative downside resistance line and may initially target the 26890 zone, defined as resistance by the inside swing lows of July 9 and 21.
Another break, above 26890, could carry more significant bullish implications, perhaps setting the stage for the peak of July 22, at 27755.