Tuesday, February 5, 2019

DOWJONES - 05 February 2019


Fundamental Highlights

Major US indices rose on Monday with the DOW posting gains of 0.7% to close at 25239. The combination of decent corporate earnings reports, feared prior to the earnings seasons, and a firmly dovish Fed, shifting market expectations considering last year’s hawkish decisions, has offered the market a foundation to keep the bull phase afloat. Moreover, economic data has painted a rosy picture for the US economy, however the state of the bull phase lies in the crucial unfolding of the US-China trade spat and its implications for the global economy. Today’s ISM non-manufacturing PMI report along with Trump’s State of the Union Speech, which has resulted in considerable market moves in the past, can be expected to drive sentiment and impact price action.

Technical Analysis

The Dow remains in positive territory as the price moved past the resistance at 25150 whilst overlooking the overbought threshold on the RSI. Should upside momentum build, prices will take out the resistance zone around 25195 and accelerate to the 25275 level whilst treading above the 20-period MA. However a trade below the 20-period MA will indicate a halt in bullish price action.

Support: 25020 / 24930
Resistance: 25275 / 25360

Chart (H4)