Wednesday, May 15, 2019

DOWJONES - 15 May 2019


Fundamental Highlights

US indices staged a recovery and ended higher on Tuesday following the previous session’s sell off prompted by China’s retaliatory tariffs against the US. Trade headlines have been swaying market direction as they did yesterday when President Trump made reassuring comments on the state of trade negotiations and aided the rebound in equities. Given that the two nations’ imposed tariffs on one another translated into risk-averse flows and sharp declines in US equities, further trade developments await to determine market direction and sentiment on the prospect of a trade deal. Today attention will be drawn to economic data as the US publishes retail sales figures and NY manufacturing index report, both of which are likely to influence price action during the day.

Technical Analysis

After falling 600 points in the previous session, the Dow managed to recover by a rise of 0.82% to end at 25532 on Tuesday. The price managed to trade above the 200-day MA around 25400 and reached the 20-period MA to form a higher low in its downtrend. Should upside momentum continue, look for price to hold above the 20-period MA at 25550 to maintain buying pressure and target the 25650 level which clears the way for a move toward 25790. Alternately, Failure to hold above the 25550 level will indicate selling pressure and target support at 25400. Moreover, look to the RSI reading to hold below the 50-midline to keep the DOW in negative territory.

Support: 25400/ 25200
Resistance: 25650/ 25790

Chart (H4)