Monday, May 13, 2019

DOWJONES - 13 May 2019


Fundamental Highlights

The Dow Index dropped over 350 points before rebounding to end the week on a positive note. The moves were motivated by President Trump whom initially stated that the US is in no rush to lock in a trade deal and later claimed that trade talks with China were constructive despite having ended without a deal. Given that US tariffs have been imposed and retaliation from China awaits, tension between the two nations burdens the prospect of an imminent trade deal and future negotiations. Today there are no major US economic releases and the lack of progress on the global trade front may limit gains and weigh on market sentiment.

Technical Analysis

The Dow Index rose 0.44% higher on Friday however remains far from reversing last week’s losses. The price fell slightly below its recent low at 25480 before paring losses to end at 25942. The RSI reading suggests there is room for further declines on the Dow, with a sustained move below the 20-period MA at 25812 required to indicate selling pressure. A break below 25650 may drive the index back to its low around 25480 followed by the 25400 level coinciding with the 200-day MA. Meanwhile a move above 26,000 would be required to indicate buying pressure and lead price higher towards resistance at 26080. The Index may range between the bounds of the Bollinger bands before potentially extending the pullback.

Support: 25650/ 25480
Resistance: 25950/ 26080

Chart (H4)