Monday, September 2, 2019

DOWJONES

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Fundamental Highlights

In the week ending 30th August, US indices had a mixed trading session on Friday with the Dow ending with a modest rise of 0.16%. Trade optimism over the resumption of US-China trade talks had been cast into doubt as the latest round of US-China tariff hikes went into effect yesterday. This may weigh on global equities and possibly inspire risk averse flows if not maintain a cautious market sentiment. Separately on economic data, burdened by global trade uncertainty, US consumer sentiment figures showed sharp declines. In addition, personal spending showed a rise of 0.6% in June while the core PCE figure held steady at 1.6%, below the Fed target thereby supporting the case for a rate cut this month. Today is a U.S Labor Holiday and volume trading should be thin unless there is trade or geopolitical headlines to direct market moves.

Technical Analysis

The Dow traded 41 points higher to end at 26403 on Friday. The price was trading within the resistance zone bounded by the 50-day MA and 100-day MA at 26550 and 26280 respectively. Dow futures are pointing lower this morning and a sustained move below the 100-day MA at 26280 is required to indicate selling pressure and drive the Dow to the support provided by the 20-period MA at 26180 followed by 26050. On the other hand, holding above 26425 would indicate buying pressure while a trade through the dynamic resistance provided by the 50-day MA at 26550 would reinforce a bullish view and enable gains towards resistance at 26660.

Support: 26280/ 26180
Resistance: 26420/ 26550

Chart (H4)
DOWJONES