The iShares MSCI World ETF traded lower on Monday, after it hit a fresh record high at 113.77. That said, although the retreat may continue for a while more, the price continues to trade above the tentative upside support line drawn from the low of March 23rd, and thus, we would consider the medium-term outlook to be positive.
As we already noted, Monday’s retreat may continue for a while more, perhaps for the price to challenge the 108.39 zone, marked by the low of November 30th and the inside swing high of November 9th, or to test the pre-mentioned upside line. The bulls could take back control near one of those territories and perhaps push the ETF up for another test near its record high of 113.77. A break higher would take us into uncharted territory, with the next possible resistance territory perhaps being the psychological round figure of 120.00.
Turning attention to our daily oscillators, we see that the RSI, although above 50, turned down after hitting resistance slightly below 70, while the MACD, although positive, lies below its trigger line. What’s more, there is negative divergence between both the oscillators and the price action. All this means that the upside speed of the price action is slowing down, which increases the chances for some more declines before, and if, the bulls decide to take charge again.
Now, in order to abandon the bullish case and start examining the case of a bearish reversal, we would like to see a decisive dip below the 105.07 level and the aforementioned upside line. This may initially open the way towards the low of November 4th at 100.58, the break of which may extend the fall towards the low of October 30th, at 95.69.
*** Source of data and charts: Investing.com
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