Tuesday, June 4, 2019

DOWJONES - 04 June 2019


Fundamental Highlights

US indices had a mixed performance on Monday as the focus shifted to tech stocks amid reports that the US government intends to oversee and investigate against giant US tech companies for antitrust violations. The news overshadowed comments from Fed member alluding to a potential rate cut due to the risks posed by global trade uncertainty and the US economy’s benign inflation. The prospect of a rate cut would normally provide a boost on Wall Street, however economic data weighed on sentiment as the ISM manufacturing index came below its estimate at 52.1 and proves the US manufacturing sector continued to see growth slow. Today, the US publishes factory orders report which will be closely watched as the figure is estimated to fall by 0.9%. Moreover, Fed Chairman Powell is scheduled to speak and will garner attention as markets will look for clues on monetary policy as they seek to validate the potentiality of a rate cut. Meanwhile, Trade developments should be monitored as they continue to dominate market sentiment and keep the bulls treading cautiously.

Technical Analysis

The Dow ended virtually flat on Monday as it gained 4 points to end at 24819. The session suggests that the Dow may not be poised for a recovery and looks to extend the pullback as the bulls struggle to take the index past the resistance at 24900 and above the 25,000 mark. While the RSI reading has exited the oversold region, the price has failed to edge above the 24900 level around the 20-period MA. Failure To edge above this level would keep the Dow ranging with a move below 24800 required to indicate selling pressure and drive the Dow to re-test the support at 24610.

Support: 24800/ 24610
Resistance: 24860/ 25000

Chart (H4)