Last week, the Canadian Insider Index was unable reverse the downside momentum we highlighted in our previous update, and investors saw the Index tumble 19 points or nearly 2%.
Relative strength, our short-term momentum indicator, continued to slide from its highs in the 60-70 range. The Index likely needs its RSI above 50 in order to hang onto the 990 support area the index has enjoyed since the start of March. The longer term momentum indicator, MACD, slipped 4 points to 10 but of more concern, saw its fast line (blue) cross down below its slow line (red), an event that could portend a change in trend to the downside. This will be something to watch closely in the weeks ahead.
As our chart illustrates, major resistance around 1010-15 halted the Index's advance on 4 separate occasions over the last 2 weeks. And unfortunately for the bulls, the Index also tumbled below the 1000 mark, cementing this as a substantial area of resistance as well. This turn of events is nothing new, for the Index battled to break above the 1000 level from November through January, losing that challenge more often than not.
Major support is currently at 990 and minor support lies at 980.
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