Tuesday, October 22, 2019



Fundamental Highlights

US indices traded higher on Monday with the Dow Index ending modestly higher as sentiment towards the US-China trade war improved while corporate earnings came in better than expected. Undermining the price-weighted index’s performance was a decline in the share price of its heaviest member Boeing due to a reported investigation against the company’s 737 Max aircraft. On global trade news, President Trump’s comments suggested that a trade deal may be signed in November and raised hopes over a breakthrough in trade negotiations. Today, the US publishes existing home sales figures which may have a muted impact as market participants will continue looking to US earnings reports and geopolitical headlines to influence sentiment and direction.

Technical Analysis

The Dow managed to hold above the support at 26720 and traded 0.21% higher to close at 26827 on Monday. A break below 26720 would lead to the confluence of support provided by 26660 level near the 20-day MA and the ascending trend line. Below this confluence of support, a more bearish view would come into play and price would target lower levels of support at 26620 and 26550 near the 50-day MA. Meanwhile, a sustained move above 26885 near the 20-period MA would be required to indicate buying pressure and target resistance at 27000 followed by 27110.

Support: 26720/ 26660
Resistance: 26880/ 27000

Chart (H4)