SPX Weekly Chart: RSI Divergence Warning — Is a Fall Coming? Weekly analysis for 26 May 2025
SPX price action with RSI bearish divergence marked on weekly timeframe, indicating possible downside risk.
Chart Summary:
- Price Trend: SPX made a fresh high near 6147.43 recently after a sharp bounce from sub-5200 levels.
- RSI (14) Weekly: Currently at 52.48 with a visible long-term bearish divergence.
Key Observations:
- Bearish Divergence: Price made higher highs between late-2023 to early-2025, while RSI consistently made lower highs — as seen by the descending RSI trendline. This type of multi-month divergence typically precedes sharp corrections or trend reversals.
- Recent Bounce: The market bounced from around 5200–5300 to over 6100, but RSI failed to break its descending trendline. RSI now at 52.48 is approaching a critical zone where it may either break out or face rejection.
Key Levels for This Week:
| Zone | Price Range (SPX) | Significance |
|---|---|---|
| Immediate Resistance | 6100–6150 | Recent top, near-term cap |
| First Support | 5750–5800 | Minor swing support |
| Major Breakdown Level | 5625–5700 | Weekly structure support |
| Downside Targets | 5350–5400 | If RSI rejection occurs |
| Major Long-Term Support | 4900–5000 | Test of multi-year trendline |
Trade Conclusion for This Week:
- Bias: Cautious to Bearish if RSI fails to cross its descending trendline (~55–58).
- Sell on Rise Zone: 6100–6150
- Targets: 5800 initially, then 5700
- Stoploss: Weekly close above 6200
- Confirmation Trigger: If RSI reverses near 54–55 and price fails at 6100–6150, expect a test of 5750–5700 within the week.
RSI Insight:
If RSI fails to break its long-term downtrend this week and rolls over, it will signal a likely decline towards 5350–5400 in the coming weeks. Only a sustained RSI breakout above 58 would negate this bearish divergence signal.
Summary:
- Sell near 6100–6150 if RSI approaches and fails at 54–55.
- Stoploss: above 6200
- Book profits: around 5800, extend to 5700 if weakness follows.
- Watch RSI behavior: The divergence is long-term and highly significant.
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