Friday, May 10, 2019

DOWJONES - 10 May 2019


Fundamental Highlights

US Indices extended losses on Thursday because US-China trade negotiations couldn’t keep tariff hikes at bay. President Trump delivered his threat of raising tariff rates on China which would take effect later today while the two nations resume trade talks. In response, China promised to take unspecified countermeasures against the US. Economic data provided no comfort as the US trade deficit widened, jobless claims rose and the PPI figure eased in April while the yearly rate held steady. Today, the US publishes Core CPI data, however markets’ will be focused on trade talks as the state of the bull phase in US equities relies on its crucial unfolding and implications for the global economy.

Technical Analysis

The Dow Index declined by 450 points before paring losses to end 0.54% lower at 25828. The Index broke through the rising trend line from March’s lows to signal bearish control as price reached an intraday low of 25480. While the RSI reading shows there is room for price to drift lower towards support at the 200-day MA around 25400, the prolonged decline may lead the Dow to a short-term recovery , which ultimately depends on US-China trade developments, to form a lower high on the downtrend . A break above the 20-period MA around 25910 signals an upside move with initial resistance at 26080 followed by the 50-period MA guarding resistance at 26200 . Alternately, sustaining below 25910 would maintain selling pressure with a break below 25650 required to signal further declines.

Support: 25650/ 25480
Resistance: 25910/ 26080

Chart (H4)