The Dow Index ended marginally lower on Tuesday after gaining over 200 points intraday following a news report that the US and China expressed concerns over whether their conditions for a trade deal would be met. Moreover, The Fed concludes its two day policy meeting later today and while interest rate is expected to remain unchanged, the rhetoric on future monetary policy alongside economic projections will be of interest to market participants given recent soft US economic data .
The Index surpassed the resistance at 26080 reaching a high around 26120 before retreating to end at 25887. Following the strong up move, the spinning top candle stick formation indicated weakening bullish momentum confirmed by the succeeding large bearish candle. Whether the move was an indication of a mere short-term pullback depends on whether the price holds above the support found at the 100-period MA. If that level doesn’t hold support, we can look for a decline to extend to the 25690 level. However holding above that level, with a trade through resistance at 26150 would bring back buying pressure and the 26240 high back into view.
Support: 25780 / 25690
Resistance: 26080/ 26150