Monday, September 30, 2019



Fundamental Highlights

US indices ended the week in negative territory as optimism over the resumption of trade talks was overshadowed by news that the US would restrict US financial investments into China. This news would limit the upside potential on US equities as it undermines the relations between the world’s two largest economies that have yet to resolve a trade war. Economic data was mixed on Friday as the US showed upbeat durable goods orders and consumer sentiment while personal spending data was on the weaker side. Today, the US publishes Chicago PMI figure which is likely to have a muted impact as markets attention is tuned to US politics and US-China trade developments.

Technical Analysis

The Dow lost 70 points to end at 26820 on Friday. The price managed to trade above the 26900 level and once again found resistance near the 50-period MA at the 27000 level. The Dow continued its sequence of lower highs on its prevailing down trend and will have to trade above the 27000 level if it were to negate it and trade higher. A sustained move above 26900 near the 20-period MA would be required to indicate buying pressure and lead to a test of the dynamic resistance provided by the 50-period MA. Meanwhile, failure to hold above the 20-period MA would maintain the bears’ control while a break below the intra-low around 26690 would lead the Dow towards the lower support at 26600.

Support: 26800/ 26690
Resistance: 27000/ 27100

Chart (H4)