Wednesday, November 7, 2018

DOWJONES - 07 November 2018


Fundamental Highlights

US stocks fluctuated over the course of the trading session on Tuesday but largely maintained a positive bias on the day. Going into the close, the Dow and the S&P 500 reached new highs for the session. The Dow advanced 173 points to 25,635 as the US midterm election results slightly favored the Democrats who took control of the House of Representatives, allowing them to block Trump's pro-business agenda. However, the Republicans retained the Senate. Looking ahead, traders continue to focus on the Federal Reserve's monetary policy announcement, with the Fed due to announce is latest decision on Thursday. Also trading today is likely to be impacted by the reaction to the outcome of the midterm elections and speculation regarding the impact on fiscal policy.

Technical Analysis

From a technical perspective, the bulls were in full control yesterday, moving the market higher throughout the whole session. Closing above Monday's high at 25510, the index confirmed its breakout after trading above the 25645 resistance intraday. However, after a few hours, prices dropped back below the resistance level forming a Bearish Hikkake pattern. The medium-term trend is now slightly bearish. The long-term trend however is still bullish, although a retest of the key technical support level 25,275 is a high probability scenario.

Support: 25275 / 20000
Resistance: 25645 /25795

Chart (H1)