Thursday, October 24, 2019



Fundamental Highlights

US indices ended modestly higher on Wednesday with the Dow rising by 0.17% in spite of weaker than expected earnings out of Caterpillar and Boeing that saw mixed reactions from market participants. Trade optimism owed to President Trump’s recent comments alluding to a preliminary US-China trade deal in November helped keep sentiment buoyed. Earnings out of Amazon highlight today’s influencing factors on market sentiment. Moreover the US publishes a slew of economic figures; durable goods orders, new home sales, manufacturing and services PMI. Expect durable goods orders to have an impact on price action during the day. Meanwhile, traders should continue monitoring trade and Brexit headlines as they remain fundamental drivers of price action.

Technical Analysis

The Dow closed 45 points higher at 26833 on Wednesday as it managed to erase early losses in the session. The index fell to October’s ascending trend-line to record a low of 26592 before rebounding to find resistance at the 50-period MA around 26855. The trend-line is now validated as three recorded lows are connected, however price has to remain above it in order to keep the uptrend intact. Today look for a sustained move above the 50-period MA to indicate buying pressure and lead the Dow towards the higher levels of resistance at 27000 and 27110. Failure to do so would maintain the sequence of lower highs forming a short resistance trend line while a break below 26592 would signal a continuation of the minor downtrend.

Support: 26660/ 26550
Resistance: 26885/ 27000

Chart (H4)